UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


SCHOOL  OF  LAW 
LIBRARY 


Trade  Associations 

THEIR  ORGANIZATION 
AND    MANAGEMENT 


By 

EMMETT    HAY    NAYLOR 

Secretary-Treasurer    of    the     Book     Paper,    Cover    Paper,    Tissue 

Paper,   and   Writing   Paper    Manufacturers  Associations; 

President,  American  Trade  Association  Executives 


NEW   YORK 

THE  RONALD  PRESS  COMPANY 

1921 


PREFACE 

Three  years  ago  some  well-meaning  friends  of  mine  sug- 
gested that  I  write  a  book  on  the  subject  of  trade  associations. 
Had  I  appreciated  the  difficulty  of  preparing  an  initial  treatise 
on  the  subject  that  should  be  at  all  adequate,  I  doubt  whether 
I  should  have  had  the  courage  to  undertake  it.  To  blaze  a 
trail  through  untrodden  territory  always  has  its  difficulties, 
hazards,  and  thrills,  and  the  path  is  apt  to  be  rough  and  uneven 
here  and  there. 

But  the  effort  involved  in  carrying  through  the  discussion 
in  this  volume  will  be  repaid  if  the  book  aids  anyone  to 
catch  and  to  hold  the  vision  of  the  better  and  more  honorable 
as  well  as  more  successful  side  of  business.  Every  man  has 
some  good  in  him,  and  most  men  have  qualities  that  are  noble 
and  fine.  Business  should  develop  rather  than  crush  these 
higher  qualities,  and  the  trade  association  is  one  important 
means  to  this  end — to  help  men  not  only  to  fill  their  pocket- 
books  and  to  gain  material  success,  but  also  to  grow  hearts  and 
souls,  and  so  gain  the  greater  reward  of  spiritual  happiness. 

The  original  matter  for  this  work  was  collected  with  no  idea 
of  a  book  in  mind,  but  to  inform  myself  of  the  various  activi- 
ties of  trade  associations  in  order  that  I  might  better  serve  the 
members  of  my  own  associations.  When  the  book  was  started, 
the  investigation  had  to  be  carried  much  further,  as  is  indicated 
in  part  by  the  range  of  the  appended  bibliography.  Much 
information  has  been  obtained  by  correspondence  and  inter- 
views, supplementing  the  scant  material  available  in  printed 
form. 

I  desire  to  express  my  gratitude  to  many  other  trade 
executives    who    have    patiently    suffered    my    inquiries    and 


VI  PREFACE 

graciously  answered  them  by  letters  and  consultations.  Some 
may  think  I  have  omitted  matters  of  importance;  everything 
could  not  be  given  but  only  that  which  seemed  best.  As  there 
will  doubtless  be  cause  for  honest  differences  of  opinion  as 
regards  many  of  my  statements,  I  trust  that  these  trade  execu- 
tives will  carry  their  kindness  one  step  further  and  give  frank 
expression  to  any  criticism.  Constructive  discussion  is  the  one 
sure  way  of  approximating  the  essential  truths  of  the  subject. 
I  am  indebted  to  Dr.  Martha  Foote  Crow  for  expert 
criticisms  and  corrections,  to  Morris  C.  Dobrow  for  constant 
interest  and  valued  help,  and  especially  to  Henry  A.  Wise, 
Esq.,  whose  careful  review  of  this  book  gives  me  confidence 
in  the  validity  of  its  legal  references  and  facts. 

Emmett  Hay  Naylor, 
New  York  City, 
January  3,  192 1. 


CONTENTS 


Chapter  Page 

I     The  Trade  Association       3 

Nature  of  the  Trade  Association 

Advantages  to  the  Industry 

Mutual  Support 

Improvement  of  Standards 

Benefits  to  UUimate  Consumer 

How  an  Association  Began 

Trouble  a  Uniting  Influence 

Temporary  Co-operation — Permanent  Organizations 

An  Information  Service 

The  Record  of  a  Trying  Year 

Importance  of  Trade  Associations 

II     Historical  Evolution 14 

The  Beginning  of  the  Trade  Association 

Medieval  Guild  and  the  Modern  Trade  Association 

Rigid  Supervision  of  the  Guilds 

The  Guild  and  Municipal  Organizations 

Effects  of  the  Guilds 

The  End  of  the  Guilds 

How  Guild  and  Trade  Association  Procedures  Differ 

The  Pool 

Early  Trade  Associations 

Monopolistic  Tendencies  in  Certain  Early  Associations 

Trade  Associations  Proper 

The  Development  of  Trade  Associations  Proper 

Development  of  National  Trade  Associations 

The  Spread  of  the  Trade  Organization 

III     Competition  and  Co-operation 25 

Co-operation  as  Old  as  the  World 

In  the  Animal  World 

Work  for  Existence 

The  New  Attitude  of  Business 

Destructive  Competition — Lower  Standards 

Destructive  Competition — Injury  to  Industry 

Intelligent  Competition 

Fair   Competition 

The  Trade  Association  and  Fair  Play 

Competition  that  Is  More  Intelligent 

The  Public  Interest 

Better  Business 


viii  CONTENTS 

Chapter  Page 

IV    Types  of  Associations 37 

Mutual  Trouble  a  Uniting  Force 
Example  of  Amalgamation 
To  Eliminate  Bad  Practices 
New  Associations 

1.  Industrial  Scope — Associations  Covering  Entire  In- 

dustries 
Special  Associations 
Producers  and  Distributers 
Interrelated  Associations 
Allied  Lines 

2.  Geographical  Extent 

Interstate,  District,  or  Local  Associations 

3.  Legal  Form 

V     Organizing  the  Association 47 

The  Name 

Aims  and  Purposes 

Code  of  Ethics 

Membership 

Applications  and  Election 

Undesirable  Applicants 

VI    Association  Routine 63 

Dues  and  Assessments 

Dues — Active  Membership 

Dues — Associate  Membership 

Budget 

A  Sample  Budget 

Fines  and  Penalties 

Association  Officers 

Duties  of  Officers 

Committees 

Publicity  and  Freedom  of  Trade 

By-Laws 

VII     Meetings 76 

Frequency  of  Meetings 

Preliminaries  to  Holding  a  Meeting 

Where  to  Hold  Meetings 

When  to  Call  Meetings 

How  to  Call  Meetings 

How  to  Conduct  a  Meeting 

Call  of  the  Meeting 

Roll-Call 

Reading  Minutes  of  the  Previous  Meeting 

Report  of  Market  Conditions 

Opinions  of  Members 

Limiting  the  Time  of  Speeches 

The  Desirability  of  Stenographic  Record 


Chapter 


CONTENTS  ^ 

Page 


Unfinished  Business 

New  Business 

Summary  by  the  President 

Adjournment 

Report   of   Meeting 

Secretary's  Annual  Report 

Reports  in  General 

Voting  in  a  Meeting 

How  to  Keep  Minutes 

Attendance  at  the  Meetings 

Traveling  Expenses 

The  Annual  Banquet 

Social  Features  .    .       ,,     ^.     „ 

Members'  Wives  at  Association  Meetings 

"Some  Ways  to  Kill  an  Association 

VIII     Commercial  Functions 9 

An  Association  a  Business  Venture 

Functions  of  Association 

Commercial   Functions— Purchasing  . 

Advantage  of  Knowledge  of  Favorable  Prices 

Raw  Material  Information 

Selling 

Costs 

Types  of  Distributers 

The  Trade  Association  and  Distribution 

Terms  of  Sale  and  Discounts 

AdveSng-Twofold  Function  of  the   Association 

Increasing  the  Demand 

"Pooled"  Advertising 

Various  Methods  Employed 

Slogans 

Indirect  Advertising 

Exhibitions 

Motion  Pictures 

Overstimulation  of  Sales  a  Danger 

Raising  the  Funds  .  . 

Suppressing  Dishonest  Advertising 

Supervision  and  Control 

Methods  of  Insuring  Honesty 

An  Association  Duty 

A  Bureau  of  Advertising  and  Publicity 

Services  to  the  Association 

Services  to  Individual  Members  , 

IX     Industrial  Functions -^^3 

Range 

Information  Regarding  Materials 

Standardization  of  Raw  Materials 

Standardization  and  Price 

Conservation 


X  CONTENTS 

Chapter  Page 

New  Sources  of  Material 

Economies  in  Production 

General  Research  Work 

Manufacturing  Operations 

Experimental  Departments 

Standardized  Production 

Educating  the  Public  in  Standards 

United  States  Bureau  of  Standards 

The  Association  and  Labor 

Association  Not  to  Settle  Wage  Questions 

What  the  Association  Can  Do 

The  Association's  Attitude  Toward  Employees 

Bureaus  of  Industrial  Relations 

Bureau  of  the  United  Typothetae 

Local  Committees  and  Their  Functions 

The  Finished  Product 

Labels 

X     Service  Activities — Informative 127 

What  Service  Is 

The  Trade  Journal 

Relation  of  the  Association  to  the  Trade  Journal 

Bulletins 

Special  Bulletins 

Trade-Mark  Bureau 

International  Trade-Mark 

The  Patent  Office  Record 

Traffic  Bureaus 

Employment  Bureaus 

Credits  and  Collections 

A  "Black  List"  Decision 

Reports  from  Bureau 

Uniform  Contracts 

Trade-Schools 

Example  of  the  Carriage  Builders  Association 

College  Courses 

Special  Educational  Agencies 

XI     Service  Activities — Protective 145 

Scope  of  Protective  Activities 

Protection  Against  Solicitation 

Watching  Legislation 

The  Tariff 

Governmental  Commissions 

Associations  at  the  Government's  Service 

Arbitration  Boards 

An  Example  of  Arbitration 

A  Conference  Committee 

Weights  and  Measures 

Insurance 

Insurance  by  an  Association 

Group   Insurance 


CONTENTS  xi 

Chapter  Page 

Protection  Against  Theft 

The  "Three- Year  Plan"  of  the  United  Typothetae 
General  Outline  of  the  Plan 
Administrative  Activities 
Executive  Activities 

1.  Organization  and  Extension  Department 
Field  Work 

Field  Representatives — Their  Various  Duties 
Control  of  Field  Representatives 

2.  Educational  and  Cost  Accounting  Department 

3.  Research  and  Service  Department 

4.  Direct-by-Mail  Advertising  Department 
The  Financial  Basis  of  the  Three-Year  Plan 

XII     Branch  Associations 162 

Special  Activities 

A  Cost  Association 

A  Statement  of  Purpose  and  Procedure 

Salesmen's  Associations 

Getting  the  Association  Point  of  View 

Salesmen  and  the  Association  Meeting 

A  Special  Association 

Purchasing  Association  or  Agency 

The  Right  of  an  Association  to  Purchase  Supplies 

Syndicate  Buying 

What  the  Association  Considers  Sound  Business 

The  Attitude  of  One  Association  Tov^rard  Discounts 

Export  Association 

Export  Packing 

Association  of  Superintendents  or  Other  Officials 

Caution  to  Branch  Associations 

Technical   Associations 

XIII  A  Cost  System  for  an  Association 182 

The  Initial  Desire 

Committee  in  Charge 

Simplicity  the  Key 

Results,  Not  Reports,  Desired 

Expanding  System 

The  Man  in  Charge 

The  Cost  Report 

Expense 

Not  Uniform  Prices 

Costs  Basis  of  Competition 

A  Simple  Form  of  Cost  Record 

Application  of  Principles  Above  Outlined 

XIV  The  Secretary — Qualifications 205 

The  Secretary,  and  Association  Success 

Personality 

Secretarial  Ability 


xii  CONTENTS 

Chapter  Page 

The  Relations  Between  Members  and  Secretaries 
The  Professional  Secretary 
Sources  for  Secretaries 

The  Business  World  the  Best  Source  of  Secretaries 
The  Instance  of  Supposed  Favoritism 
Relation  of  Secretary  to  Members 
Not  Too  Reserved 
Not  Too  Gushing 
The  Dangers  of  Talkativeness 
Considerateness 

Relation  of  the  Secretary  to  the  Industry 
An  Authority,  Not  a  Dictator 
The  Secretary  as  a  Trade  Adviser 
The  Secretary  Should  Be  a  Thinker 
Modesty  a  Secretarial  Asset 
Unnecessary  Activities 
New  Ideas 

Accepting  Suggestions 
The  Secretary  and  the  Critic 
The  Critic  an  Incentive  to  Better  Work 
The  Secretary  in  Difficult  Situations 
Family  Rows 

Keeping  Up  Association  Spirit 
The  Character  of  the  Secretary 

XV    The  Secretary — Procedure 224 

The  Valuable  Secretary 

Office  Enthusiasm 

Office  Suggestion — The  Office  Manager 

Handling  Correspondence 

Personal  Letters 

Research  Work 

A  Systematic  Program 

The  Yearly  Program 

Calls  from  Members 

Secretarial  Visits  to  Members 

Averting  Discussion 

The   Secretary  As  Treasurer 

Compensation 

The  Secretary's  Opportunity 

XVI     Facts  and  Their  Value 235 

The  Value  of  Correct  Trade  Information 

Destructive  Competition  the  Result  of  Trade  Ignorance 

Eliminating  Market  Fluctuations 

Shut-Downs  Expensive 

The  Advance  of  Business  Research 

An  Important  Function  of  an  Association 

Confidence  the  Key-note 

The  Danger  of  Undertaking  Too  Much 

Simple  Reports  at  First 

Elaborating  Reports 


CONTENTS 


XUl 


Chapter 


Page 


Participation  in  Reports  Voluntary,  Not  Compulsory 
Making  Reports  Accurate 
Making  Reports  Understandable 
Reports  Relieve  Worry 
Industrial  Report  Services 

XVII  Statistics  and  Their  Use        248 

The  Statistician  . 

Reliable  Statistics  Not  Expensive  Relatively 

Best  to  Begin  Modestly 

Not  Necessary  to  Wait  for  Unanimity 

Useful  Forms  for  Member's  Reports 

Late  Reports 

Analyzing  Reports 

Uniform  Comparison 

Essential  Information 

Accuracy  and  Promptness 

Developing  the  Report 

Individual  Records 

Raw  Material  Reports 

Purchases  Reports 

Standard  Nomenclature 

Inventory  Report 

Labor  Reports 

Sales  Reports 

Individual  Reports 

Graphic  Reports 

Exposition  by  Secretary 

The  Monthly  Letter 

Annual  Reports  and  Special  Reports 

Right  Presentation  Essential 

Some  Principles  Reaffirmed 

XVIII  Fair  Prices 278 

Methods  of  Arriving  at  Prices 

The  Evil  Results  of  Price-Cutting 

Price-Fixing  Economically  Wrong 

Price-Fixing  Legally  Wrong 

Sherman   Law  and   Clayton   Act   Not   Detrimental   to 

Business 
Intelligent  Co-operative  Competition 
Government  Cannot  Produce  Results 
Prices  and  the  Association 
Dangers  Encountered 
The  Open  Price 
Price  Information 
Open  Bids  or  Contracts 
Sealed  Bids 
Records  of  Contracts 
Open  Prices 

Market  Reports  of  Past  Prices 
Form  for  Reports  Used 


XIV 


CONTENTS 


Chapter 


Page 


Averaging  Prices  Not  Allowable 
Composite  Reports 
Discussing  Prices  at  Meetings 
Three  Methods  Summarized 

XIX     The  Law  and  The  Association 299 

The  Sherman  Anti-Trust  Law 
The  Sherman  Law  and  Trade  Associations 
Origin  of  Trade  Laws 

Relation  of  Monopolies  and  Restraints  of  Trade 
The  Rule  of  Reason 

The  Change  of  Attitude  Toward  "Big  Business" 
Application  of  the  Law 
The  Clayton  Anti-Trust  Act 
Federal  Trade  Commission  Bill 
Observing  Speed  Laws 

No  One  Suffers  by  Joining  the  Right  Kind  of  Associa- 
tion 
Exchange  of  Prices 

Exchange  of  Prices  Just  as  Legal  as  the  Stock  Market 
What  the  Association  Legally  Can  and  Should  Do 
Stabilizing  the  Market 
The  Part  of  Costs  in  Fixing  Prices 
Legal  Supervision 

The  Secretary  Should  Not  Be  the  Legal  Adviser 
Counsel  Should  Be  the  Only  Legal  Supervisor 
Dangerous  Correspondence 
The  Association  a  Clearing  House 
Conclusion 

Appendix  A — Bibliography 321 

B — Legal   Cases  Affecting   Trade   Associations      327 
C — Trade  Associations  in  The  United  States     .      345 


FORMS 


Form  Page 

1.  Report  of  Members  at  Meeting 83 

2.  Association    Label 126 

3.  Label  Registration  Card 131 

4.  (a)   Notice  of  Application  for  Registration  of  Brand 132 

4.  (b)   Notice  of  Registration  of  Brand 132 

5.  Association  Credit  Report — Inquiry  Blank 140 

6.  Association  Credit  Report — Request  for  Information  from  Mem- 

bers    141 

7.  Association  Credit  Report — Member's  Information  Blank    .     .     .  141 

8.  Association  Cost    Sheet 188 

9.  Member's  Weekly  Report 250,  251 

10.  Association  Office  Weekly  Work  Sheet 254 

11.  Reminder  of   Non-Receipt  of  Report 255 

12.  Association  Weekly  Return  Reports  (Numerical) 259 

13.  Association  Graphic  Record  of  Orders  Received,  Production  and 

Shipment 260,  261 

14.  Association  Weekly  Trade  Barometer 262 

15.  Association  Comparative   Report  of  Orders  and  Production  .     .  263 

16.  Association  Graphic  Record  of  Purchases,  Sales,  and  Stock  on 

Hand 264 

17.  Member's  Weekly  Raw  Material  Report 265 

18.  Association  Weekly  Raw  Material  Report 266 

19.  Monthly  Stock  Sheet  Report  from  Members 267 

20.  Association  Weekly  Raw  Material  Report 268 

21.  Member's  Quarterly  Raw  Material  Inventory  Report 269 

22.  Association  Quarterly  Inventory  Report 270 

23.  Member's  Quarterly  Wage    Report 271 

24.  Association  Quarterly  Wage   Report 272 

25.  Open-Price  Report — Member's  Report  Blank 289 

26.  Open-Price  Report — Second  Report  from  Members 289 

27.  Open-Price  Report — Association  Report  of  Order  Placed     .     .     .  290 

28.  Open-Price  Report — Association  Abstract  of   Proposals  ....  291 

29.  Open-Price  Report — Member's  Report  of  Orders  Booked     .     .     .  292 

30.  Open-Price  Report — Member's  Monthly  Report  of  Material  Man- 

ufactured and  Shipments 292 

31.  Open-Price  Report — Member's  Monthly    Report   of    Tonnage   of 

Contracts  Closed 293 

32.  Report  from  Member  and  to  Members ;  Past  Market  Transactions  294 
33-  Association  Monthly  Report  of  Past  Market  Prices 296 


TRADE  ASSOCIATIONS 

THEIR   ORGANIZATION 
AND    MANAGEMENT 


CHAPTER  I 

THE  TRADE  ASSOCIATION 

Nature  of  the  Trade  Association 

A  trade  association  is  an  organization  for  the  mutual 
benefit  of  individuals  or  companies  who  are  engaged  in  the 
same  kind  of  business.  It  is  a  promoter  of  co-operative  work 
among  persons  or  companies  who  manufacture  or  deal  in 
the  same  product.  It  is  known  by  some  specific  name  which 
designates  the  industry  or  business  in  which  its  members 
are  engaged.  As  the  membership  may  be  widely  scattered, 
the  activities  of  the  association  usually  extend  over  one  or 
more  states  or  over  the  entire  nation. 

A  trade  association  does  not  as  a  rule  limit  membership 
to  manufacturers  alone,  but  may  include  wholesalers,  retailers, 
and  all  classes  of  concerns  that  deal  in  the  product  of  some 
one  particular  industry.  On  the  other  hand  it  is  sharply 
to  be  differentiated  from  a  commercial  association  as  that 
term  is  commonly  used,  or  from  a  local  manufacturers'  asso- 
ciation. 

A  commercial  association  is  a  federation  of  individuals  or 
companies  that  manufacture  or  deal  in  a  variety  of  products. 
It  usually  bears  some  such  title  as  "chamber  of  commerce," 
"board  of  trade,"  "business  men's  association,"  etc.  In  most 
cases  it  has  a  fixed  relation  to  the  city  or  town  in  which  it 
is  located  and  its  membership  is  chiefly  composed  of  those 
who  do  business  or  live  in  that  particular  city  or  town. 

A  local  association  of  manufacturers  is  not  usually  a 
trade  association  since  it  is  frequently  made  up  of  persons 
engaged  in  various  lines  of  industry.     A  trade  association  is 

3 


4  TRADE   ASSOCIATIONS 

identified  with  a  single  industry  or  closely  related  group  of 
industries. 

Advantages  to  the  Industry 

A  trade  association  unquestionably  benefits  the  individuals 
of  the  industry  which  it  represents,  and  aids  as  well  in  the 
general  economic  scheme  of  production  and  distribution.  It 
gives  its  members  a  sense  of  comparative  and  relative  values 
which  makes  for  the  sanest  and  most  constant  conditions 
under  which  to  produce  and  market  their  goods.  Just  as 
social  welfare  depends  upon  the  education  and  advancement 
of  the  individual,  so  industrial  welfare  depends  upon  the 
development  in  methods  and  manner  of  procedure  of  each 
component  part  of  the  industry  concerned. 

In  many  trades  in  this  country,  especially  since  the  World 
War,  the  manufacturer,  the  merchant,  and  the  retailer  are 
beginning  to  appreciate  that  they  have  problems  in  common 
and  that  the  success  of  one  depends  upon  the  success  of  the 
other.  Each  group  today  usually  has  its  trade  association, 
and  these  associations  are  beginning  to  co-operate  with  one 
another  in  a  proper  way,  just  as  the  individuals  who  make 
up  the  respective  memberships  are  doing.  By  conferring 
through  joint  committees  and  by  other  arrangements  a  more 
stable  condition  is  being  produced  in  the  entire  industry, 
which  results  in  good  to  all,  including  the  consumer. 

Price  agreements,  premium  offers,  bonuses,  rebates,  and 
such  bad  practices  can  be  properly  corrected  by  a  trade  asso- 
ciation, and  while  sometimes  the  process  of  elimination  is 
difficult,  yet  as  a  matter  of  education  it  is  bound  to  result 
favorably  in  the  end. 

Mutual  Support 

The  trade  association  has  the  duty  of  keeping  watch  of 
such  proposed  legislation  as  is  inimical  not  only  to  its  inter- 


THE   TRADE   ASSOCIATION  5 

ests  but  to  the  interests  of  the  people  as  a  whole.  Too  often 
regulatory  proposals  are  introduced  in  legislative  bodies 
which  are  the  result  of  a  narrow  or  single  point  of  view 
ihat  fails  to  take  into  consideration  the  economic  and  social 
factors  involved.  It  is  one  of  the  functions  of  the  trade 
association  to  see  that  all  facts  are  known  and  that  whatever 
legislation  is  passed  is  based  on  a  complete  knowledge  of 
conditions,  never  on  personal  or  class  prejudices,  nor  yet 
on  mere  well-meaning  effort  to  remove  deep-seated  difficul- 
ties by  hasty  expedients.  Reform  in  the  laws  is  necessary 
when  based  on  knowledge  but  under  no  conditions  should 
laws  be  enacted  without  a  thorough  hearing  of  all  sides  of 
a  subject. 

The  trade  association  offers  as  one  of  its  activities  an 
excellent  medium  for  calling  these  matters  to  the  attention 
of  business  men  and  of  enlisting  the  aid  of  Congress  or 
state  legislation  in  supporting  or  opposing  pending  measures. 
No  trade  association  should  ever  become  a  lobbying  organ- 
ization; it  should  merely  see  that  people  are  duly  informed. 
But  it  is  far  better  in  considering  legislation  to  get  the  opinion 
of  an  association,  which  is  a  collective  opinion,  than  that  of 
small  groups  or  of  individuals. 

The  Chamber  of  Commerce  of  the  United  States  of 
America  is  an  example  of  what  can  be  done  in  collecting 
the  opinion  of  the  business  men  throughout  the  country.  Its 
work,  however,  applies  chiefly  to  general  business  and  legisla- 
tion while  the  work  of  the  specific  trade  association  applies 
to  such  business  and  legislation  as  affects  its  own  particular 
interest. 

Improvement  of  Standards 

It  may  be  conservatively  stated  that  the  trade  association 
is  the  best  means  of  effecting  progressive  and  wide-spread 
changes  in  an   industry.      In   their   effect   upon  the   various 


6  TRADE   ASSOCIATIONS 

hindrances  and  malpractices  of  trade  the  influence  of  such 
associations  is  largely  remedial.  They  do  not  attempt  to 
eliminate  the  helpful  and  necessary  forms  of  competition; 
on  the  other  hand  they  offer  many  advantages  through  con- 
certed action.  By  promoting  higher  standards  in  business 
practices  as  well  as  in  quality  of  product,  and  by  discouraging 
or  opposing  any  letting  down,  they  perform  a  service  that  no 
single  individual,  firm,  or  corporation  could  successfully  ac- 
complish by  any  means  whatsoever.  As  ignorance  is  chiefly 
responsible  for  the  evil  effects  sometimes  coming  from  com- 
petition, the  trade  associations  keep  their  members  informed 
about  every  phase  and  development  of  their  particular  field 
of  activity  and  in  this  way  they  furnish  a  sensible  basis  for 
the  production  and  distribution  of  their  commodity. 

The  trade  association  places  competitors  on  a  more  nearly 
equal  basis,  making  business  success  less  dependent  upon 
chance  and  financial  power  and  more  dependent  upon  general 
merit,  quality,  and  service.  More  than  that,  while  the  asso- 
ciation is  organized  for  the  benefit  of  a  selective  group  of 
men  or  for  an  entire  industry,  it  benefits  all  consumers  as 
well. 

Benefits  to  Ultimate  Consumer 

The  ultimate  consumer,  who  is  so  carefully  protected  by 
the  creators  and  guardians  of  our  laws,  is  not  the  victim  as 
some  would  assert  of  the  activities  of  trade  associations;  he 
is,  rather,  the  beneficiary.  Surely  his  interests  are  best 
served  when  an  industry  becomes  so  efficient  as  to  furnish 
him  the  highest  quality  at  the  lowest  profitable  price.  A 
profitable  price  is  a  continuing  price;  an  unprofitable  price 
is  destructive  and  therefore  temporary. 

When  the  consumer  can  purchase  his  goods  at  a  figure 
that  precludes  the  possibility  of  a  selling  profit,  the  seller 
as  well  as  the  whole  industry  itself  is  seriously  injured;  and 


THE   TRADE   ASSOCIATION  7 

sooner  or  later  the  consumer  must  pay  for  his  temporary 
advantage  by  either  a  shortage  in  the  goods  and  a  consequent 
increase  in  price,  or  by  a  deterioration  in  the  quality.  Con- 
structive competition  will  always  keep  the  price  as  low  as 
possible,  while  at  the  same  time  it  allows  the  producer  or 
distributer  a  reasonable  profit.  It  is  for  the  association  so 
to  educate  its  members  that  they  will  know  what  an  article 
costs  to  produce,  and  hence  will  not  sell  it  either  for  less 
than  cost  or  for  more  than  a  fair  profit. 

The  interests  of  the  consumer  are  also  better  safeguarded 
by  the  elimination  of  fraudulent  selling,  especially  through 
dishonest  advertising  methods  or  other  misrepresentations  of 
goods.  It  is  generally  through  the  instrumentality  of  trade 
associations  that  these  reforms  are  made  possible.  It  will  be 
recognized  that  any  advantage  enjoyed  by  the  industry  is 
bound  in  the  end  to  be  finally  shared  with  the  consumer,  not 
so  much  through  any  altruistic  spirit  as  through  the  result  of 
legitimate  competition  and  economic  conditions. 

How  an  Association  Began 

Some  years  ago,  in  a  certain  industry  which  may  serve 
as  a  type,  there  were  several  mills  located  in  various  parts  of 
the  country.  Each  mill  was  in  effect  a  little  castle  in  itself 
where  the  owner  was  a  feudal  lord  who  was  ever  on  the 
lookout  with  a  keen  and  suspicious  eye  for  a  possible  enemy. 
His  salesmen  were  his  knights,  whom  he  instructed  to  take 
business  at  any  cost  away  from  his  arch  enemies — ^his  com- 
petitors. He  counted  it  the  best  kind  of  business  to  capture 
his  competitors'  trade  and  customers.  His  creed  was  the 
survival  of  the  strongest  and  he  made  a  veritable  fetish  of 
open,  cutthroat  competition.  To  do  less  was  to  do  nothing, 
he  thought.  He  had  perhaps  never  met  any  of  his  fellow 
mill-owners;  to  him  they  were  just  unprincipled,  scheming 
thieves,  whom  he  had  no  desire  to  know  or  even  to  recognize 


8  TRADE    ASSOCIATIONS 

except  as  a  force  opposing  his  own  progress.  His  competitors 
thought  the  same  of  him  and  of  each  other.  He  congratu- 
lated himself  secretly,  and  sometimes  openly,  upon  being  a 
keen,  astute  business  man  skilled  in  the  little  tricks  of  the 
trade.  Like  his  father  before  him  he  was  noted  for  his 
business  acumen. 

Trouble  a  Uniting  Influence 

But  a  day  came  when  one  of  these  mill-owners — we  may 
call  him  Smith — got  into  trouble.  He  ran  short  of  raw 
material  and  could  not  obtain  it  at  any  price.  With  a  con- 
tract that  must  be  filled  his  only  way  out  would  be  to  borrow 
from  his  nearest  neighbor,  who  happened  to  have  a  reasonably 
good  stock  of  raw  material  on  hand  as  Smith  had  ascertained 
by  simple  bribery.  The  necessity  was  humiliating  but  he 
yielded  to  it  and  went  to  the  neighboring  mill  for  a  supply. 
He  told  of  his  difficulties  and  was  amazed  to  find  his  com- 
petitor— almost  human.  Before  he  knew  it  he  found  himself 
smoking  one  of  his  rival's  cigars.  As  they  talked  he  was  sur- 
prised to  discover  that  they  had  problems  in  common.  They 
discussed  these  rather  guardedly  but  with  enough  definite- 
ness  to  be  understood.  In  the  end  Smith  went  away  with 
the  assurance  that  his  rival  would  let  him  have  enough  raw 
material  to  enable  him  to  meet  his  contract  on  time.  He  had 
a  queer  feeling.  He  had  been  compelled  to  break  a  precedent, 
a  sacred  principle;  yet  he  had  found  his  competitor  not  such 
a  bad  fellow  after  all.  He  was  perplexed.  Was  it  possible 
that  his  former  enemy  had  granted  the  loan  out  of  kindness, 
or  was  there  some  trick  in  the  matter  somewhere? 

The  ice  had  been  broken,  however,  and  after  that  he 
met  his  competitor  more  often.  Then  came  a  strike  in  the 
industry  and  about  the  same  time  the  prospect  of  a  tariff 
revision.  This  matter  ended  in  a  meeting  of  all  the  com- 
petitors.    Not  a  single  man  there  would  believe  any  other 


THE    TRADE    ASSOCIATION  9 

man  present,  even  under  oath,  but  they  were  each  and  all 
in  trouble  and  each  hoped  to  find  a  way  of  helping  himself 
out  of  his  difficulties. 

Through  several  meetings  they  worked  together  with  much 
suspicion  and  some  friction,  but  in  the  end  the  strike  was 
satisfactorily  settled  and  the  tariff  schedule  at  Washington 
remained  as  before.  When  the  work  was  all  over  they 
thought  it  fitting  to  celebrate  the  happy  ending  with  a  dinner. 
By  this  time  each  of  them  had  learned  that  the  others  were 
not  half  as  unworthy  as  he  had  thought.  A  certain  fellow- 
feeling  had  been  awakened  and  the  old,  uncompromising 
spirit  of  distrust  and  suspicion  was  somehow  gone.  Some 
of  them  actually  felt  a  little  friendly  toward  the  others. 

Temporary  Co-operation — Permanent  Organizations 

A  well-known  text  says  that  it  is  not  good  for  man  to  be 
alone.  Despite  personal  prejudices,  man  is  fundamentally  a 
social  being.  Tribes,  communities,  cities,  states,  nations,  give 
evidence  of  this  sociological  and  psychological  fact.  And  it 
occurred  to  a  few  of  these  manufacturers  that  since  co-opera- 
tion in  time  of  trouble  had  resulted  in  so  much  benefit,  there 
might  be  other  problems  they  could  work  out  together.  They 
decided  to  come  together  more  often  if  only  for  sociability. 
Later  it  seemed  well  to  be  a  little  more  authoritative  in  their 
acts,  to  have  a  better  defined  organization ;  and  so  they  chose 
a  name,  adopted  by-laws,  and  lo,  a  trade  association  was 
born! 

At  the  outset  the  association  failed  of  the  support  of 
some  of  the  competitors,  but  soon  secured  a  majority  and 
proved  well  worth  while.  So  many  important  matters  came 
up  that  it  was  decided  to  establish  an  office  and  employ  a 
secretary.  At  first  the  members  thought  of  choosing  a  secre- 
tary from  among  their  own  number,  but  fear  of  possible 
prejudice  on  his  part  led  them  to  select  an  outside  man  in 


lO  TRADE   ASSOCIATIONS 

whom  they  had  confidence  and  who  they  felt  would  be  per- 
fectly impartial. 

More  frequent  meetings  were  held.  The  oftener  they  met 
the  more  they  found  there  was  to  do.  One  of  the  first 
things  they  wanted  was,  of  course,  to  discuss  and  if  possible 
determine  the  prices  at  which  they  were  to  sell  their  com- 
modities. They  had  a  hazy  notion,  however,  of  certain  re- 
strictions imposed  by  the  federal  laws,  and  feared  lest  they 
might  inadvertently  render  themselves  liable  to  indictment. 
To  make  sure  of  that  point  they  retained  a  lawyer,  who 
advised  them  at  all  their  meetings  just  what  they  could  and 
what  they  could  not  legally  do. 

An  Information  Service 

Eventually  their  association  worked  round  to  the  salient 
principle  that  if  its  members  were  properly  informed  regard- 
ing exact  market  conditions  there  was  little  likelihood  that 
any  of  them  would  make  a  serious  mistake  in  the  sale  of 
his  product.  They  learned  at  once  that  they  could  not  de- 
termine a  uniform  sales  price.  But  they  recognized  that  the 
tendency  to  cut  prices  and  sell  below  cost  usually  arose  from 
ignorance  of  exact  market  conditions,  and  that  frequently 
such  ignorance  could  be  attributed  to  information  received 
from  unreliable  sources. 

In  order  that  they  might  know  as  definitely  as  possible 
what  the  supply  and  demand  of  the  market  would  be  they 
decided  to  have  their  secretary  compile,  at  regular  intervals, 
statistics  that  would  show  exactly  how  the  market  stood.  The 
members  severally  agreed  to  furnish  to  the  secretary  con- 
fidentially the  information  about  production,  orders,  and  ship- 
ments that  was  necessary  in  order  to  compose  these  reports. 
The  secretary  was  not  to  make  public  the  private  information 
received  from  members,  but  was  to  issue  all  statistics  in 
summaries. 


THE   TRADE   ASSOCIATION  II 

Furthermore,  in  order  that  the  members  might  give  cor- 
rect information,  it  was  found  essential  that  each  one  should 
know  definitely  what  it  cost  him  to  manufacture  his  product. 
At  first  a  few  who  had  good  cost  systems  showed  some  of 
their  competitors  the  principles  and  proper  practice  of  cost 
accounting;  for  they  rightly  assumed  that  a  competitor  who 
knows  his  costs  is  less  to  be  feared  than  one  who  runs  his 
business  by  rule-of -thumb  methods.  Gradually  the  industry 
approached  a  basis  of  reasonably  uniform  costs. 

We  must  not  think,  how^ever,  that  all  this  work  of  estab- 
lishing sources  of  information,  a  uniform  cost  system,  etc., 
was  accomplished  in  a  few  months.  Much  time  was  con- 
sumed and  much  talk  and  urging  was  recjuired  before  certain 
members  would  consent  to  give  the  secretary  the  desired  in- 
formation. It  was  not  until  several  years  had  passed  that 
all  the  manufacturers  of  the  industry  were  convinced  that 
they  should  be  members  of  the  association,  and  not  until 
some  time  later  that  all  were  willing  to  furnish  information 
or  to  consider  a  uniform  cost  system. 

The  Record  of  a  Trying  Year 

The  records  show  clearly  what  this  association,  by  being 
correctly  informed,  did  for  the  industry  it  represents  in  one 
particular  year.  In  many  American  industries  191 5  was  a 
very  trying  year  and  it  was  especially  so  for  the  industry 
in  question.  But  while  orders  and  production  fluctuated  con- 
siderably throughout  that  year,  prices  remained  uniform. 
Towards  the  latter  part  of  the  year,  as  the  cost  of  raw  mate- 
rial increased,  prices  advanced  proportionately. 

This  result  was  directly  traceable  to  the  association,  since 
every  member  knew  exactly  when  he  received  his  weekly 
report  that  he  was  getting  his  share  of  business.  Reports 
of  the  prices  that  obtained  in  raw  materials  were  also  care- 
fully observed.     Business  w-as  indeed  poor,  but  each  manu- 


12  TRADE   ASSOCIATIONS 

factiirer  knew  that  he  was  no  worse  off  than  his  competitor. 
He  did  not  fear,  as  he  might  have  done  previously,  that 
someone  else  was  getting  his  business  away  from  him;  there- 
fore he  had  no  inclination  to  send  his  salesmen  out  to  sell 
his  product  at  a  lower  figure  than  his  competitors.  Prices  did 
not  decline. 

In  this  case  there  was  no  collusion,  agreement,  meeting  of 
minds,  or  anything  of  the  kind.  Each  manufacturer  was 
simply  informed  as  to  the  exact  market  conditions  and  used 
his  own  individual  and  independent  judgment.  The  results 
as  shown  by  statistics  were  that,  whereas  under  much  less 
trying  circumstances  the  aggregate  industry  would  probably 
have  lost  many  hundreds  of  thousands  of  dollars  through 
undercutting  of  prices  and  ruinous  competition,  the  intelligent 
co-operation  of  these  manufacturers  had  saved  them  between 
$5,000,000  and  $6,000,000.  No  hard  feelings  had  been  en- 
gendered and  both  manufacturers  and  customers  were  well 
satisfied.  A  year  that  otherwise  might  have  proved  disas- 
trous had  ended  with  a  fair  degree  of  success,  viewed  from 
the  standpoint  of  harmony,  satisfaction,  and  profits.  Nor 
should  it  be  forgotten  that  where  prices  are  cut  recklessly 
and  where  every  man  tries  to  undersell  the  other,  the  dis- 
astrous result  is  not  merely  temporary  since  the  industry 
requires  several  years  to  recover  from  the  effects  of  such 
conditions. 

The  association  whose  experience  has  been  narrated  is 
now  one  of  the  many  strong  trade  associations  in  the  United 
States.  Its  members  are  doing  many  other  things  of  a  co- 
operative nature,  such  as  working  together  on  freight  rates, 
insurance,  credits,  trade  abuses,  etc.  One  result  of  such 
co-operation  is  seen  in  the  fact  that  not  long  ago,  when  a 
part  of  the  industry  was  affected  by  a  local  strike  situation, 
the  competitors  in  that  particular  district  got  together,  gave 
one  of  their  members  power  of  attorney,  and  appointed  him 


THE    TRADE   ASSOCIATION  ^3 

to  handle  the  labor  difficulty  for  them  all,  which  he  did  suc- 
cessfully. 

What  has  been  accomplished  is  further  shown  by  a  remark 
of  one  of  these  manufacturers.  He  said:  ''I  used  to  think 
that  Jones  was  one  of  the  meanest  and  most  contemptible 
men  that  ever  drew  the  breath  of  life,  but  since  I  have  come 
to  know  him  at  our  meetings  and  have  visited  him  at  his 
mill,  I  have  found  him  to  be  one  of  the  finest  men  whom  I 
have  ever  had  the  honor  to  know."  Men  who  several  years 
ago  would  not  trust  one  another  even  in  the  smallest  matter 
are  now  working  together,  and  are  not  only  making  larger 
profits  but  are  working  more  happily  than  they  ever  thought 
possible  under  former  conditions. 

Importance  of  Trade  Associations 

There  are  at  present  about  i,ooo  trade  associations  in 
this  country.  They  are  the  result  of  an  economic  evolution 
whose  beginnings  date  from  far  back  in  the  past.  In  the  last 
decade  their  value  has  been  more  and  more  recognized.  Their 
activity,  however,  as  a  part  of  American  enterprise  in  business 
has  only  begun.  Their  development  in  the  next  ten  years 
will  be  one  of  the  most  prominent  features  of  our  economic 
growth. 


CHAPTER  II 

HISTORICAL  EVOLUTION 

The  Beginning  of  the  Trade  Association 

The  idea  that  underHes  the  trade  association  is  extremely 
old;  the  tendency  to  form  such  organizations  has  existed 
since  almost  the  beginning  of  the  commercial  life  of  man. 

The  Bible  contains  allusions  to  organizations  of  gold- 
smiths, apothecaries,  and  spice  merchants.  From  the  tendency 
of  certain  trades  to  congregate  in  one  locality,  indicated  by 
references  in  Jeremiah  to  "the  bakers'  street,"  and  in  Josephus' 
"Wars  of  the  Jews"  to  "cheese-makers'  valley,"  we  might 
infer  that  then  as  later  the  need  of  meeting  common  problems 
led  to  organization. 

In  Greece  and  Rome  there  were  associations  of  merchants 
for  trade  both  by  land  and  by  sea  and  a  beginning  of  the 
organization  of  artisans  into  what  were  known  as  guilds 
was  made.  The  romantic  pages  of  medieval  history,  moreover, 
are  full  of  illustrations  of  mercantile  and  industrial  associa- 
tions in  countries  as  widely  separated  as  England,  Siberia, 
Burma,  and  China. 

Medieval  Guild  and  the  Modern  Trade  Association 

In  many  ways  the  development  of  our  trade  associations 
has  followed  practically  the  same  lines  as  the  early  growth 
of  the  guilds  of  medieval  Europe — those  of  England,  for 
example.  While,  however,  the  same  motives  prompted  the 
formations  of  the  earliest  of  both  of  these  types  of  asso- 
ciations, their  later  growth  is  distinctly  divergent.  The  spirit 
of  good-fellowship  is  common  to  both,  which  shows  that  the 
importance  of  holding  together  the  co-operative  interest  of 

14 


HISTORICAL  EVOLUTION  15 

members  is  just  as  necessary  today  as  it  was  centuries  ago. 
On  the  other  hand,  as  the  old  guild  progressed,  monopoly, 
self-interest,  and  exclusiveness  were  intensified;  whereas  the 
modern  trade  association  accentuates  democracy,  breadth  of 
vision,  and  a  spirit  of  general  service  to  the  community  at 
large. 

There  were  two  classes  of  guilds  in  England — the  "guild- 
merchant,"  representing  traders,  and  the  "guild-craft,"  repre- 
senting artificers,  producers.  For  the  purpose  of  self-pro- 
tection membership  was  made  exclusive  and  the  number  of 
persons  who  could  join  an  organization  was  strictly  limited. 
Because  of  the  regard  in  which  the  guild  indorsement  of 
quality  and  product  was  held  both  classes  had  virtual  command 
of  the  market. 

The  "guild-merchant"  was  a  trade  organization  of 
"masters"  among  the  merchants,  each  important  class  of 
which  had  its  own  guild.  The  membership  was  made  up 
of  traders  and  dealers,  i.e.,  buyers  and  sellers.  It  is  in  this 
sense  that  they  assumed  the  name  of  "masters."  No  com- 
modity could  be  purchased  by  a  consumer  from  the  maker, 
nor  could  such  goods  be  sold  by  anyone  other  than  a  member 
of  the  particular  "guild-merchant"  who  dealt  in  such  com- 
modity. Those  old  guild  members  had  a  fine,  paying 
monopoly. 

The  craft  guilds  were  associations  of  producers,  i.e.,  of 
artisans,  or  craftsmen.  Woe  betide  the  man  who  was  trying 
to  ply  his  trade  outside  of  one  of  these  guilds,  for  he  had 
not  the  slightest  chance!  But  on  the  other  hand  the  rigid 
rules  of  membership  of  these  craft  guilds  and  their  exacting 
system  of  inspection  produced  a  high  standard  of  workman- 
ship. It  is  an  interesting  thing  to  look  back  upon  old  iron- 
work, furniture,  pottery,  and  books,  to  see  the  marks  or  the 
stamps  of  these  guilds,  which  served  the  same  purpose  in  those 
days  as  does  today  the  mark  of  "sterling"  on  silver. 


l6  TRADE    ASSOCIATIONS 

Rigid  Supervision  of  the  Guilds 

The  guilds  had  a  definite  system  of  training,  so  that  the 
artisans  or  workmen  of  any  kind  were  sure  to  keep  up  the 
quality  represented  and  required  by  the  particular  craft.  A 
most  careful  subdivision  of  industries,  trades,  and  crafts  was 
enforced  to  prevent  any  guild  member  from  encroaching  upon 
the  field  of  another.  Each  man  was  limited  to  his  own  specific 
calling  and  was  prevented  from  handling  too  wide  an  assort- 
ment of  goods  or  from  making  too  great  a  variety  of  products. 
The  Rev.  J.  Malet  Lambert  points  out  in  Chapter  XXXIV  of 
his  'Two  Thousand  Years  of  Gild  Life"  that  "allied  trades 
were  originally  confined  to  their  own  departments;  no  car- 
penter could  do  the  work  of  a  joiner  or  shipwright;  no  cobbler 
could  make  shoes."  Not  much  difference  in  this  from  our 
trade  unions ! 

The  Guild  and  Municipal  Organizations 

As  time  went  on  the  guild  became  more  and  more  identified 
with  a  municipal  organization.  This  was  for  purely  selfish 
purposes,  in  order  to  enforce  price  regulation  through  the 
medium  of  local  government.  Dr.  Edwin  R.  Seligman  in  his 
book  on  the  medieval  guilds  of  England  describes  this  phase 
of  guild  regulation  as  follows. 

Under  the  supposition  that  the  interests  of  the  whole  com- 
munity could  best  be  served  by  avoiding  the  danger  of  un- 
restricted competition,  the  government  interfered  to  ordain 
periodical  enactments  of  reasonable  prices — reasonable,  that 
is  to  say,  for  both  producer  and  consumer.  Tabulated  tarififs 
and  financial  regulations  of  all  things  from  beer  to  labor 
filled  the  statute  books. 

Effects  of  the  Guilds 

From  what  has  been  said  about  the  exclusiveness  and  the 
monopolistic  tendencies  of  the  guilds  one  must  not  infer 
that,  in  spite  of  their  arbitrary  character,   they  did  not  do 


HISTORICAL   EVOLUTION  I? 

very  much  to  help  develop  industry  and  trade.  New  indus- 
tries without  the  protection  of  these  old  organizations  would 
in  those  days  have  had  great  difficulty  in  keeping  up  the 
struggle  for  existence.  The  guild  enabled  them  to  thrive  and 
flourish.  The  guild  also  improved  industrial  processes.  Most 
of  all,  perhaps,  the  individual  skill  and  training  which  they 
insured  meant  much  to  medieval  civilization.  The  sympathies 
and  interests  of  the  guild  members  were  generally  confined 
to  their  own  town,  and  therefore  their  outlook  was  of  neces- 
sity narrow  and  limited ;  still  it  was  quite  abreast  of  the 
standard  for  that  period.  It  must  be  remembered  that  at 
the  time  the  guilds  were  at  their  height  learning  was  confined 
chiefly  to  monasteries  and  a  few  of  the  leading  laymen,  while 
the  general  education  of  the  people  was  low.  Hence  organ- 
izations of  this  kind  were  most  essential  for  the  purpose  not 
only  of  educating  but  of  protecting  the  people  within  their 
own  particular  crafts. 

Nevertheless  in  protecting  themselves  the  guilds  were 
heartless  in  their  relation  towards  others,  and  they  were  in- 
strumental in  producing  much  of  the  poverty  and  general 
lowness  of  life  which  were  wide-spread  during  the  latter  part 
of  the  sixteenth  century  and  through  the  seventeenth. 

The  End  of  the  Guilds 

As  the  guilds  became  more  and  more  domineering  and 
tasted  the  fruits  of  power  through  municipal  authority,  they 
began  to  lose  their  commercial  nature  and  to  become  a  body 
politic.  Then  they  lost  their  significance  as  trade  organiza- 
tions and  became  purely  a  means  for  promoting  private  and 
monopolistic  interest.  The  "liveried  companies"  of  London, 
the  great  guilds  of  the  city  each  of  which  wore  its  distinguish- 
ing livery  or  uniform  costume,  are  an  illustration  of  this  trend 
towards  trade  plutocracy. 

During  the  seventeenth  century  the  guilds  began  to  lose 


l8  TRADE   ASSOCIATIONS 

their  grip.  They  were  not  dead,  but  their  power  steadily 
diminished.  Then  at  the  end  of  the  eighteenth  century  came 
the  flood  of  inventions,  the  introduction  of  the  factory  system, 
and  the  consequent  downfall  of  the  guilds.  With  the  intro- 
duction of  the  factory  system  quality  was  sacrificed  for 
quantity,  and  the  thing  most  desired  was  a  good  price  rather 
than  a  good  product.  Thus  the  purpose  for  which  the  guilds 
had  existed  for  several  centuries  was  weakened,  and  in  a  short 
time  it  was  obliterated. 

How  Guild  and  Trade  Association  Procedures  Differ 

The  guilds,  wielding  almost  absolute  authority,  were  able 
to  enforce  their  wills  through  a  system  of  regulations  and 
penalties,  checked  up  by  most  careful  inspection.  The  modem 
trade  association  seeks  to  achieve  the  same  results  through 
educating  both  the  producer  and  the  consumer,  instead  of 
penalizing  them. 

The  price-fixing  functions  of  the  old  guilds  persisted  in 
the  earlier  American  pools.  Under  this  system  the  attempt 
was  made  to  fix  prices  much  as  under  the  ancient  guilds  but 
the  people  soon  found  that  this  method  was  economically 
unsound.     Later  on  it  came  to  be  recognized  as  illegal  also. 

Instead  of  bringing  about  reasonable  prices  by  means  of 
force  as  the  old  guilds  did,  the  modern  trade  association 
seeks  the  same  end  through  encouraging  an  accurate  knowl- 
edge of  costs  and  market  conditions  on  the  part  of  the  manu- 
facturer or  distributer.  This  results  in  the  elimination  of 
unintelligent  and  ignorant  underselling,  in  the  place  of  which 
we  have  intelligent  rivalry,  not  so  much  in  price  as  in 
quality.  Thus  in  the  modern  trade  association  reasonable 
profits  are  assured  through  individual  intelligent  action,  and 
quality  is  assured  through  constructive  competition. 

The  old  guild  throttled  the  individual  initiative  and  self- 
expression  of  every  one  of  its  members.     A  member  simply 


HISTORICAL   EVOLUTION  19 

had  to  do  as  the  will  of  the  majority  required.  If  the 
majority-will  was  pernicious  and  destructive,  he  was  never- 
theless helpless.  In  the  modern  trade  association  every  mem- 
ber develops  his  business  by  his  own  standards  and  retains 
perfect  freedom  of  self-expression  and  initiative.  This 
method  brings  about  much  more  satisfactorily  and  permanently 
the  selfsame  results  that  the  guilds  tried  to  enforce  through 
regulation  and  penalties. 

The  Pool 

The  introduction  of  the  factory  system  so  enormously 
increased  the  amount  of  competition  that  there  was  a  con- 
sequent and  natural  dwindling  of  profits.  The  question  that 
producers  and  distributers  then  had  to  consider  was:  How 
could  prices  be  maintained — prices  which  allowed  producers 
and  distributers  a  fair  profit — when  the  buyers  were  com- 
paratively few  and  the  competitors  altogether  too  many?  In 
the  United  States  the  pool,  regardless  of  its  unsound  economic 
principle,  was  the  most  convenient  arrangement  that  sug- 
gested itself. 

As  a  step  between  the  old  guild  and  the  association 
this  scheme  of  maintenance  of  price  and  profits  is  interesting. 
There  were  three  ways  in  which  these  pools  could  secure  in- 
creased profits  for  their  members: 

1.  By  limiting  the  available  supply. 

2.  Through   agreements   to   maintain   a   fixed   price,   re- 

gardless of  demand  or  supply. 

3.  By  the  establishment  of  local  monopolies  thus  con- 

trolling  the   distribution   of   a   product   through   a 
given  territory. 

Of  course  there  were  modifications  and  combinations 
of  these  principal  methods,  but  they  all  led  to  the  same  result. 
A  common  type  of  pool  was  an  arrangement  for  the  division 


20  TRADE   ASSOCIATIONS 

of  profits  before  the  profits   were  made.      The   well-known 
whiskey  pools  are  examples  of  this  type. 

It  is  obvious  to  the  most  casual  observer  of  basic  business 
principles  that  the  scheme  of  the  pool  was  fundamentally 
unsound ;  it  offered  all  kinds  of  temptations  for  men  to 
violate  their  agreements  regardless  of  the  penalties  imposed 
for  breaches  of  trust.  And  since  the  pools  were  unsound 
and  unhealthy  they  had  a  short  and  somewhat  unsatisfactory 
life.  They  represent,  however,  in  connection  with  our  present 
study,  the  parting  of  the  roads.  One  path  leads  to  private  com- 
binations ;  the  other  to  representative  trade  associations. 

Early  Trade  Associations 

During  the  period  when  the  pool  flourished  and  declined 
in  the  United  States  a  number  of  organizations  were  operating 
under  the  name  of  trade  associations.  Though  most  of  these 
were  nothing  more  nor  less  than  pools,  some  few  were  tending 
in  a  different  direction.  While  the  element  of  monopoly  was 
not  altogether  lacking  even  here,  some  of  these  associations 
exhibited  new  traits  which  were  sounder  and  more  con- 
structive. They  were  trade-building  organizations  which 
attempted  to  improve  conditions  in  the  industry  as  a  whole. 
The  means  which  they  used,  how^ever,  were  decidedly  ques- 
tionable. Eventually,  and  quite  properly,  these  means  were 
regulated  by  law. 

Monopolistic  Tendencies  in  Certain  Early  Associations 

Long  before  the  passage  of  the  Sherman  Anti-Trust  Act 
the  statute  books  of  most  states  contained  laws  that  forbade 
conspiracies  in  restraint  of  trade  and  interference  with  free 
and  unrestricted  competition.  Under  the  Federal  Anti-Trust 
Act  of  1890  covering  conspiracies  in  restraint  of  interstate 
commerce,  the  Attorney-General  brought  several  of  these  early 
associations  into  court.     Among  the  first  cases  was  that  of 


HISTORICAL   EVOLUTION  21 

the  Coal  Dealers  Association.  The  government  claimed  that 
the  coal  dealers  were  fixing  prices  and  maintaining  a  higher 
scale  of  rates  for  non-members,  and  the  association  was 
temporarily  enjoined. 

Then  came  the  case  of  the  United  States  against  the 
Eastern  States  Lumber  Association,  in  which  it  was  claimed 
that  the  lumber  association  was  restraining  trade  through  the 
instrumentality  of  a  black  list.  The  association  was  enjoined 
from  the  circulation  of  such  a  list. 

Wheeler  Stenzel  v.  the  National  Window  Glass  Jobbers 
Association  was  an  interesting  case.  It  was  held  here  that 
the  association  attempted  to  select  customers  and  to  fix  prices 
and  output.  This  was  a  violation  of  the  seventh  section  of 
the  Sherman  Anti-Trust  Act,  and  it  was  decided  that  al- 
though the  association  had  a  right  to  select  customers  it  did 
not  have  the  right  to  fix  prices  or  output. 

Most  of  these  associations  were  merely  local  organiza- 
tions which  were  in  a  position  to  control  production  and 
sales  in  their  particular  field.  As  their  membership  was  small 
and  their  activities  arbitrary  they  were  not  in  the  least  repre- 
sentative of  the  national  trade  associations  of  today. 

Trade  Associations  Proper 

By  this  gradual  evolution,  through  the  guild,  the  pool, 
and  the  early  trade  association,  we  come  at  last  to  the  trade 
association  of  today.  The  present  trade  association  follows 
a  different  line  from  any  of  its  predecessors  and  conducts  its 
work  without  any  intention  or  attempt  to  exercise  monopolistic 
or  restraining  powers. 

The  Development  of  Trade  Associations  Proper 

As  the  trade  association  proper,  at  first  small  and  local, 
realized  the  geographical  limits  of  its  activities,  it  began  to 
grow  and  to  absorb  other  associations  in  the  same  industry 


22  TRADE   ASSOCIATIONS 

until  finally  it  became  an  organization  of  national  scope.  The 
local  associations  still  survived  to  look  after  the  interests  of 
their  specific  industrial  community,  but  they  realized  that  if 
any  efifective  v^ork  was  to  be  done  they  must  have  broader 
connections.  The  work  of  co-operating  for  a  common  end 
was  henceforth  conducted  by  state  and  district  associations. 
This  broader  form  of  trade  organization  did  not  necessarily 
eliminate  the  others,  but  rather  supplemented  their  effective- 
ness. The  state  association  was  merely  a  step  to  the  national 
organization. 

The  stages  of  transition  from  the  medieval  guilds  to  the 
trade  association  of  today  parallel  the  progress  of  civiliza- 
tion as  people  became  more  educated  and  thus  more  prosper- 
ous— as  government  improved,  as  inventions  came,  and  as 
means  of  transportation  and  communication  extended  them- 
selves over  the  country  and  over  the  world.  There  is  no 
longer  any  place  for  a  small,  narrow,  local  organization  which 
does  not  form  a  part  of  a  great,  national  body.  Every  in- 
dustry in  this  country,  although  sectional  as  regards  the 
locality  where  it  is  situated  or  whence  it  draws  its  supplies 
of  raw  materials,  is  nevertheless  national  in  its  distribution 
and  therefore  must  of  necessity  be  a  national  organization. 
The  national  trade  association  as  it  exists  in  America  today 
is  of  course  a  very  recent  growth.  An  interesting  forecast 
of  it  was  given,  however,  in  the  English  work  already  re- 
ferred to,  Lambert's  "Two  Thousand  Years  of  Gild  Life." 
He  has  raised  the  question  of  the  possibility,  under  modern 
conditions,  of  some  organization  which  could  fill  the  place 
of  the  old-time  guilds.     He  continues: 

The  enormous  difficulties  of  the  task  will  better  be  realized 
by  asking  ourselves  what  form  of  an  organization  would 
have  to  take  place  today  which  would  reproduce  a  system 
as  complete  and  effectual  as  that  of  300  years  ago.  In 
consequence  of  the  practical  unity  of  each  trade  over  vast 


HISTORICAL    EVOLUTION  23 

areas,  as  governed  by  the  rapidity  of  communication  and 
the  markets  of  the  world,  the  isolation  which  made  it  possible 
for  each  to  be  self-contained  in  each  town  must  give  place 
to  wide-spread  national  and  even  international  associations 
in  which  the  local  trade  societies  would  occupy  their  several 
places  in  a  system  of  federation.  Each  trade  or  manufacture 
must  be  sufficiently  fixed  and  stable  in  its  products  and 
methods  of  production  as  to  be  capable  of  having  its  pro- 
cedure reduced  to  general  rules. 

Development  of  National  Trade  Associations 

The  first  great  national  trade  association  in  the  United 
States  was  the  United  States  Brewers  Association,  organized 
in  1862.  The  Carriage  Builders  National  Association  was 
founded  in  1872.  This  association  has  maintained  for  years 
a  trade-school  in  New  York  City.  The  American  Paper  and 
Pulp  Association  dates  from  1878;  the  Laundrymens  Na- 
tional Association  of  America  from  1883 ;  the  National  Asso- 
ciation of  Brass  Manufacturers  from  1886;  the  National 
Wholesale  Lumber  Dealers  Association  from  1894;  and  the 
National  Association  of  Retail  Grocers  from  1896.  These 
are  still  among  the  most  important  and  flourishing  examples. 

Trade  associations  in  this  country  have  only  begun  to 
realize  their  possible  usefulness  and  influence.  The  next  few 
years  will  doubtless  see  a  growth,  improvement,  and  standard- 
ization of  these  organizations  which  will  mark  a  definite 
phase  in  our  national  economic  development. 

In  the  discussion  of  the  early  American  pool  it  was  pointed 
out  that  trade  groups  were  then  hesitating  at  the  fork  of 
the  road.  On  one  hand  lay  the  broad  and  alluring  highway 
with  its  unforeseen  pitfalls  leading  to  private  industrial  com- 
bination, and  on  the  other  hand  the  straight  and  narrow 
path  ending  in  legitimate  trade-building.  The  trade  groups 
that  followed  the  less  tempting  of  the  two  roads  developed 
the  association  as  it  exists  today.     Their  progress,  however, 


24  TRADE   ASSOCIATIONS 

was  not  the  result  of  a  sudden  transformation,  but  was  rather 
a  slow  and  gradual  change  of  view. 

The  early  associations,  whatever  their  mistakes  might  have 
been,  were  the  leaders  in  "blazing  the  trail"  to  industrial 
improvement.  Gradually  law  and  experience  forced  them  to 
operate  within  their  proper  sphere  and  limit.  The  trade  asso- 
ciations of  today,  with  scarcely  an  occasional  exception, 
appreciate  and  observe  scrupulously  their  legitimate  limita- 
tions and  functions. 

The  Spread  of  the  Trade  Organization 

Although  statistics  are  sometimes  employed  to  gauge  the 
importance  of  the  growth  of  a  trade  movement  this  method 
cannot  be  applied  in  connection  with  trade  associations.  The 
industry  that  can  boast  of  the  greatest  number  of  associations 
is  not  always  the  one  best  organized.  Some  of  the  most 
efficiently  organized  industries  have  but  a  single  organiza- 
tion that  is  national  in  scope,  with  an  orderly  system  of  district 
and  local  branches.  In  other  fields  where  conditions  are 
less  regular  many  organizations  exist  coincident  in  scope  and 
purpose.  There  are,  however,  in  this  country  at  least  200 
important  national  and  interstate  associations  few  of  which 
overlap  each  other. 

Unfortunately  the  most  authoritative  sources  fail  to  yield 
a  complete  list  of  associations.  The  list  given  in  the  back 
of  this  book  is  as  nearly  complete  as  possible.  As  the  move- 
ment is  constantly  developing  no  list  which  is  made  up  today 
will  long  remain  complete,  but  it  can  at  least  be  accepted  as 
indicative  of  the  trend  of  the  times. 

There  is  a-  distinct  challenge  to  these  trade  associations 
to  build  carefully  and  thoroughly  in  the  work  which  they 
can  do,  for  in  proportion  as  they  become  more  nearly  perfect 
so  will  our  industrial  life  become  more  prosperous  and  our 
nation  more  commercially  secure  and  more  nearly  supreme. 


CHAPTER  III 
COMPETITION  AND  CO-OPERATION 

Co-operation  as  Old  as  the  World 

Human  nature  has  a  short  memory  and  therefore  is  prone 
to  brand  as  "newfangled"  some  things  that  are  as  old  as  the 
hills  and  as  solid.  That  is  the  way  some  people  look  at 
co-operation.  They  and  their  fathers  and  grandfathers  have 
viewed  business  solely  from  the  angle  of  unchecked,  de- 
structive competition,  and  it  is  impossible  for  them  to  realize 
that  co-operation  rather  than  destructive  competition  is  the 
law  of  life. 

Competition  when  unchecked  is  bad  and  in  the  long  run 
self-destructive.  Modern  civilization  has  decided  that  certain 
bounds,  restraints,  rules  of  the  game,  must  be  set  and  re- 
spected. But  competition  thus  controlled  implies — even  neces- 
sitates— a  considerable  degree  of  co-operation,  even  among 
persons  or  agencies  whose  interests  are  directly  competitive. 

In  the  Animal  World 

Animate  nature  when  superficially  examined  appears  like 
an  immense  battlefield  where  nothing  is  to  be  seen  but  de- 
struction. Birds  of  prey  hunt  gulls,  gulls  feed  on  fish,  fish 
devour  smaller  fish;  thus  goes  on  the  struggle  for  existence. 
But  deeper  knowledge  of  animals  and  plants  reveals  equally 
the  relation  of  mutual  aid,  or  co-operation. 

The  bees  have  many  enemies;  their  honey  has  many  ruth- 
less admirers  in  animals  of  every  sort  from  the  beetle  and 
bear  up  to  man.  Yet,  by  working  in  common,  these  in- 
dustrious little  creatures  multiply  their  individual  forces;  by 
resorting  to  a  temporary  division  of  labor  combined  with  the 

25 


26  TRADE   ASSOCIATIONS 

capacity  of  each  bee  to  perform  every  kind  of  work  when 
required,  they  attain  such  a  degree  of  well-being  and  safety 
as  no  isolated  animal  can  ever  expect  to  achieve  however 
strong  or  well  armed  it  may  be.  In  their  combinations  they 
are  often  more  successful  than  highly  developed  man  when 
he  fails  to  take  advantage  of  well-planned  mutual  assistance. 

In  the  case  of  the  ants,  as  Forel  has  pointed  out,  the 
fundamental  feature  of  life  in  many  species  is  the  obliga- 
tion to  follow  co-operation.  An  ant-hill,  superior  in  relative 
size  to  much  that  man  has  accomplished,  with  its  paved 
roads,  vaulted  galleries,  spacious  halls  and  granaries,  harvest- 
ing and  "malting"  of  grain,  rational  methods  of  nursing  the 
eggs  and  larvae,  building  special  nests  for  rearing  the  aphides 
which  Linnaeus  so  picturesquely  described  as  "the  cows  of  the 
ants" ;  is  one  of  the  finest  examples  in  nature  of  mutual  aid 
and  the  beneficent  results  which  follow. 

In  these  exceptional  instances  the  co-operation  found  in 
the  animal  world  is  continuous  and  elaborate.  There  are 
numberless  cases,  however,  with  animals  of  widely  varying 
types,  of  partial  and  temporary  co-operation  to  attain  specific 
objects.  The  birds  slowly  move  southward  as  the  winter 
comes,  or  gather  in  numberless  societies  and  undertake  long 
journeys.  Many  rodents  gather  in  large  villages  in  order 
to  obtain  the  necessary  protection  when  at  work.  The  rein- 
deer, when  the  lichens  are  dry  in  the  interior  of  the  continent 
migrate  toward  the  sea.  Buffaloes  cross  an  immense  con- 
tinent in  order  to  find  food.  Beavers,  when  they  grow 
numerous  on  a  river,  divide  their  settlement  into  two  parts 
and  go,  the  old  ones  down-stream  and  the  young  ones  up- 
stream, thus  avoiding  competition. 

Work  for  Existence 

What  we  think  of  as  the  struggle  for  existence  in  the 
animal  world  might  be  described  more  truthfully  as  the  law 


COMPETITION    AND   CO-OPERATION  ^7 

of  work  for  existence.  Self-preservation  demands  constant 
effort.  No  living  being  may  with  impunity  neglect  work. 
But  the  law  of  nature  w^hich  enjoins  work  for  self-preserva- 
tion can  be  fulfilled  in  a  better  way  than  by  destructive  com- 
petition with  other  individuals.  In  the  great  struggle  for 
life — for  the  greatest  possible  fulness  and  intensity  of  life 
with  the  least  waste  of  energy — natural  selection  continually 
seeks  out  ways  for  avoiding  destructive  competition  as  much 
as  possible. 

Many  animals  store  food  or  fall  asleep  as  the  season 
comes  when  destructive  competition,  or  struggle  for  existence, 
should  set  in.  And  when  animals  can  neither  fall  asleep  nor 
migrate,  nor  lay  in  stores,  nor  themselves  grow  their  food 
like  the  ants,  they  do  what  the  titmouse  does,  as  Wallace 
in  "Darwinism,"  Chapter  V,  has  so  charmingly  described : 
they  resort  to  new  kinds  of  food  and  thus  avoid  competition. 
Kuropatkin  made  a  study  of  actual  struggle  for  existence 
among  animals  in  the  severe  regions  of  northern  Asia.  The 
animals  which  emerged  alive  from  the  ordeal  were  "impover- 
ished in  vigor  and  health."  From  this  he  reached  the  con- 
clusion that  no  progressive  evolution  of  the  species  can  be 
soundly  based  upon  periods  of  keen  and  destructive  competition. 

The  teaching  of  nature,  in  fact,  from  the  forest,  the  bush, 
the  river,  and  the  ocean,  is  that  competition  without  co-opera- 
tion is  destructive  and  fatal ;  co-operation  in  some  form  or 
other  is  undoubtedly  the  surest  means  for  giving  to  each  and 
all  the  greatest  safety,  the  best  guaranty  of  real  prog- 
ress. 

It  is  by  following  this  lesson  that  man  has  reached  the 
position  upon  which  he  now  stands  socially  and  industrially. 
Every  human  being  is  a  member  of  society,  and  society  has 
come  to  be  what  it  is  only  by  mutual  aid  among  its  members. 
As  soon  as  a  member  of  society  wages  war  upon  his  fellow- 
members  society  itself  is  brought  into  a  state  of  confusion. 


28  TRADE   ASSOCIATIONS 

The  disorder  which  thus  arises  is  harmful  to  all  its  members 
as  well  as  to  the  one  who  started  the  trouble.  The  interests 
of  the  individual,  accordingly,  compel  him  to  avoid  strife 
where  it  is  possible  and  instead  to  seek  safety  in  mutual  aid 
or  co-operation. 

The  New  Attitude  of  Business 

In  the  minds  of  those  familiar  with  present  economic 
evolution  and  development  in  the  business  world,  there  is  no 
question  that  co-operation  is  being  recognized  more"  and  more 
as  fundamental.  In  economic  life,  as  in  the  life  of  nature, 
men  have  been  discovering  through  experience  that  it  pays 
to  work  together. 

The  modern  trade  association  is  one  result  of  the  business 
world's  realization  that  unrestricted  competition  is  unnatural 
and  fallacious  and  that  constructive,  intelligent  competition, 
together  with  studied  co-operation,  is  not  only  desirable  but 
essential  to  industrial  welfare.  Men  have  long  supposed,  as 
shown  in  the  preceding  chapters,  that  competition  was  the 
life-blood  of  trade  and  that  it  was  necessary  to  be  piratical 
and  heartless  to  succeed.  Now  it  is  recognized  that  com- 
petition is  simply  a  tonic,  whereas  the  life-blood  of  trade  is 
co-operation.  The  old  conception  was  that  industrial  success 
was  built  on  the  failure  of  others ;  the  new  conception  is  that 
every  failure  in  an  industry  is  felt  disadvantagebusly  by 
every  member  of  that  industry  and  by  the  consumer  as  well, 
and  that  the  temporary  profits  enjoyed  by  the  victor  generally 
cannot  offset  the  damage  and  retrogression  suffered  by  the 
industry  as  a  whole. 

Destructive  Competition — Lower  Standards 

Experience  shows  that  unrestricted  competition  produces 
far  more  harm  than  good.  Business  men  should  match  their 
wits  and  skill  in  order  to  produce  better  goods  and  sell  them 


COMPETITION    AND   CO-OPERATION  29 

for  less  money,  but  when  a  man  is  working  as  an  individualist 
without  appreciating  his  inevitable  relation  to  others  he 
naturally  thinks  his  own  thoughts  and  becomes  selfish.  He 
is  apt  to  have  his  broader  vision  obscured  by  immediate  and 
petty  inclinations.  Too  often  the  result  is  that  in  order  to 
win,  that  is  to  lessen  the  cost  of  production  and  thereby  to 
be  able  to  quote  lower  prices,  he  makes  himself  liable  to 
charges  of  short  weight,  poor  workmanship,  adulteration,  or 
substitution. 

Abstractly  this  man  would  admit  that  any  one  of  these 
practices  is  wrong  and  injures  his  business  irreparably.  But 
the  constant  strain  of  destructive  competition  so  wears  down 
his  business  standards  and  his  sense  of  ethical  values  that 
eventually  he  finds,  or  other  people  find,  that  he  is  engaging 
in  practices  which  in  the  beginning  he  would  have  condemned 
most  severely. 

Eventually  every  manufacturer  under  vicious  competition 
must  feel  the  effect  of  such  warfare.  A  few  years  ago  in  a 
certain  industry  there  was  a  three-cornered  fight  between 
the  manufacturers  of  a  certain  article.  One  of  the  factors 
had  large  capital  behind  it  and  endeavored  to  eliminate  the 
other  two,  but  in  the  process  of  elimination  the  quality  and 
service  as  given  b}-  each  was  so  inferior  that  the  public 
rebelled  and  refused  to  purchase  the  article  at  all  and  the 
industrv  nearly  went  to  pieces.  After  this  the  fight  was 
discontinued  and  the  three  factors  agreed  to  stop  their  de- 
structive practices.  It  took  the  industry  several  years  to 
win  back  the  confidence  and  good-will  of  its  former  customers. 
This  instance  of  destructive  competition  lost  the  industry 
millions  of  dollars  and  did  no  earthly  good  because  the  effort 
was  entirely  selfish  and  contrary  to  fundamental  economic 
and  natural  laws. 

It  is  wrong  to  name  lower  and  still  lower  prices  until 
profits  dwindle  and  disappear  and  goods  are  sold  at  or  below 


30  TRADE   ASSOCIATIONS 

cost.  All  parties  concerned  in  such  competition  are  desperate 
and  are  forced  to  meet  the  tactics  of  others.  One  wrong 
produces  another,  with  the  result  in  the  end  of  either  an 
illegal  combination  or  a  financial  failure.  The  former  is  as 
fatal  as  the  latter  is  final  and  the  competing  parties  are  not 
the  only  ones  who  suffer.  The  ultimate  consumer,  who  during 
the  process  of  such  destructive  competition  may  seem  to  be 
gaining  an  advantage,  in  the  end  either  loses  his  goods 
through  the  failure  of  some  producer  or  is  forced  to  pay  a 
high  price  in  order  to  allow  the  producer  to  recoup  his 
losses. 

Destructive  Competition — Injury  to  Industry 

We  seldom  hear  of  the  business  failures  which  result 
from  price  warfare.  It  is  a  great  deal  like  the  news  that 
we  get  about  dealings  in  stocks;  the  man  who  makes  money 
is  always  ready  to  talk  about  it.  The  statement  that  business 
failures  eliminate  the  unfit  may  be  true  in  some  cases  but 
it  sounds  too  much  like  the  old  Spartan  method  which  prac- 
ticed the  killing  of  all  children  who  appeared  to  be  physically 
unfit. 

Just  as  the  principles  of  eugenics,  that  deal  with  the  cause, 
are  more  practical  than  this  Spartan  method  of  dealing 
with  the  effect,  so  the  principles  of  co-operation  are  much 
better  for  helping  new  and  smaller  companies  to  get  on  their 
feet  than  the  theory  of  killing  them  off  through  destructive 
competition.  If  business  failures  were  the  result  solely  of 
incapacity  the  rule  of  the  survival  of  the  fittest  might  be 
justified,  but  bankruptcy  too  often  is  not  a  reflection  of  in- 
capacity but  rather  of  financial  weakness. 

Moreover,  while  the  concern  that  is  least  able  to  with- 
stand the  ravages  of  destructive  competition  may  be  the  first 
to  succumb,  every  business  failure  within  an  industry  is  a 
blow  to  that  whole  industry  because  competition  which  brings 


COMPETITION    AND    CO-OPERATION  31 

out  failures  often  kills  off  the  strong  as  well  as  the  weak 
through  a  blind  disregard  for  their  relations.  In  the  industry 
the  small  producer  is  often  just  as  necessary  a  link  in  the 
chain  as  a  large  producer,  and  since  a  chain  is  no  stronger 
than  its  w-eakest  link,  the  weak  may  cause  the  downfall  of 
the  strong. 

In  the  canned  goods  industry  several  years  ago,  before 
law's  corrected  the  practice  of  adulteration,  competition  had 
forced  some  of  the  weaker  and  smaller  manufacturers  to  put 
unfair  goods  on  the  market.  This  caused  a  scandal  which 
was  taken  up  by  the  newspapers  and  which  reflected  upon 
the  entire  industry.  It  almost  ruined  the  sales  of  the  large 
companies  who  were  making  reliable  goods  but  who  had 
succeeded  in  forcing  the  small  and  weak  manufacturers  to 
bring  about  this  landslide  of  condemnation  upon  the  entire 
product. 

Not  long  ago  the  automobile  truck  manufacturers  in  this 
country  were  conducting  a  war  of  elimination  with  the  hope 
that  all  trucks  in  the  United  States  would  eventually  be  made 
by  three  or  four  companies.  Thereby  they  were  seriously 
hurting  themselves  in  the  eyes  of  the  public.  A  small  com- 
pany, let  us  say,  makes  500  trucks  and  sells  them.  Because 
of  destructive  competition  and  limited  capital  this  company 
is  forced  out  of  the  market;  hence  the  owners  of  these  trucks 
are  not  able  to  get  the  needed  service  or  repair  parts,  with 
the  result  that  they  are  disgusted  with  the  use  of  an  automobile 
truck.  Let  twenty-five  companies  be  affected  in  this  way 
and  it  means  that  from  3,000  to  5,000  users  of  automobile 
trucks  are  convinced  through  experience  that  trucks  are  more 
expensive  than  practical.  The  large  manufacturers  failed 
to  realize  that  they  really  were  competing  with  the  public 
as  well  as  with  the  small  producers  of  trucks  and  the  public 
is  very  sensitive  to  a  tax  upon  its  ideas  of  convenience  and 
service. 


32  TRADE   ASSOCIATIONS 

Intelligent   Competition 

This  is  a  fair  example  of  why  destructive  competition 
that  produces  business  failures  not  only  should  be  avoided 
by  manufacturers  but  through  co-operation  should  be  entirely 
eliminated.  Fair  and  open-price  trading  and  educational 
plans  that  improve  the  cjuantity  and  quality  of  production 
will  accomplish  far  more  in  business  betterment  and  individual 
prosperity  than  the  old  system  of  scalp-hunting. 

Competition  should  be  more  intelligent  and  effective  than 
the  selfish  striving  of  several  men  to  get  business  away  from 
each  other.  It  should  be  the  intelligent  friendly  striving  of 
man  with  man  to  increase  the  total  production  and  thus 
obtain  results  which  will  benefit  all,  while  each  producer  takes 
his  share  of  the  increased  business  according  to  his  relative 
capacity.  Competition  at  all  tiiucs  should  be  based  on  quality 
and  service  and  never  on  prices.  This  is  not  a  theory  or 
an  Utopian  dream ;  in  many  instances  it  has  been  made  a 
fact  that  has  brought  greater  prosperity  and  happiness  to 
all.  It  is  the  basis  of  the  modern  business  man's  philosophy 
of  service.     It  is  the  application  of  the  law  of  nature. 

Fair  Competition 

The  new  competition,  new  only  in  the  sense  of  having 
been  recently  recognized  by  the  majority,  does  not  take  away 
from  business  the  elements  of  interest  and  stimulus.  It  en- 
courages the  keenest  kind  of  effort.  But  the  effort  and 
competitive  struggle  must  be  in  the  open.  The  new  com- 
petition begins  when  the  trade  association  develops  conditions 
both  physical  and  mental  that  tend  to  eliminate  secret  charging 
on  the  part  of  competitors. 

The  Trade  Association  and  Fair  Play 

The  new  competition  avoids  both  extremes,  the  false 
competition    based    entirely    on    secrecy    and    secret    prices, 


COMPETITION   AND   CO-OPERATION  33 

whereby  certain  sellers  in  collusion  with  certain  purchasers 
have  the  advantage  over  other  sellers  who  are  kept  in  the 
dark;  and  just  as  much  the  suppressed  competition  which  is 
based  on  collusion  or  fixed  prices,  where  the  sellers  in  com- 
bination have  a  merciless  advantage  over  the  purchaser  who 
is  in  the  dark.  The  new  competition  is  based  simply  on 
frankness  of  procedure  and  open  prices.  The  bidder  or 
seller  and  the  purchaser  deal  frankly  on  an  open  footing  of 
equality  with  each  other  and  know  exactly  what  is  taking 
place.  Just  as  the  old  competition  required  secrecy  and  collu- 
sion, the  new  competition,  as  represented  through  trade 
associations,  requires  both  close  knowledge  of  the  market 
and  straightforward  dealing. 

A  trade  association,  as  an  exponent  of  open  and  fair 
competition,  requires  free  disclosure  among  the  competitors 
making  up  the  membership  of  the  association,  of  information 
regarding  such  work  as  is  on  hand,  all  elements  entering 
into  its  cost,  and  the  terms  and  conditions  upon  which  it  is 
being  done. 

Undesirable  trade  practices  which  may  have  developed  in 
the  past  are  eliminated  by  mutual  agreement.  All  bids 
actually  made  on  any  particular  piece  of  work  are  disseminated 
or  discussed.  Conditions  that  concern  the  general  welfare  of 
the  industry  are  also  taken  into  consideration.  Standards 
are  set  up  and  everything  possible  is  done  to  benefit  alike  the 
producer,  the  distributer,  and  the  consumer  of  the  com- 
modity which  the  association  represents.  In  a  word,  the 
objects  of  the  new  competition,  working  through  the  means 
of  a  trade  association,  are  to  change  the  conditions  which 
lead  to  cutthroat  policies  and  to  establish  the  manufacturing 
or  merchandising  activity  of  the  industry  on  a  sound  and 
straightforward  basis  by  the  adoption  of  uniform  practices 
and  open  and  fair  prices.  Old  impractical  prejudices  and 
practices  must  give  way  to  this  better  method. 


34  TRADE   ASSOCIATIONS 

Competition  that  Is  More  Intelligent 

This  new  competition,  based  on  studied  co-operation  and 
taking  into  consideration  everyone  who  has  anything  to  do 
with  a  commodity,  is  not  something  to  be  somided  from  a 
pulpit  but  rather  to  be  practiced  in  actual  business.  Not  so 
many  years  ago  the  crafty  trader  was  considered  the  success- 
ful merchant.  Misleading  statements,  unfair  advantages, 
underhand  practices,  and  sly  tactics  comprised  his  stock-in- 
trade.  Under  this  system  the  price  asked  was  generally  far 
above  what  the  seller  expected  to  receive  and  the  quality 
ordered  was  seldom  the  quality  delivered.  The  purchaser  by 
seeking  unfair  concessions  encouraged  misrepresentations,  just 
as  the  seller  by  degrading  his  product  invited  unreasonable 
offers.  Even  if  the  buyer  discovered  that  an  inferior  grade 
had  been  substituted  for  the  article  offered,  he  would  have 
been  assured  of  no  better  treatment  elsewhere.  The  result 
was  that  buyers  and  sellers  had  little  confidence  in  each  other 
and  were  always  suspicious  and  on  their  guard.  Suspicious 
of  being  deceived,  they  had  little  scruple  about  deceiving. 
Under  such  conditions  honest  dealing  was  discouraged;  it 
was  considered  a  weak  kind  of  trading,  and  business  came 
to  be  regarded  as  more  or  less  a  dishonorable  pursuit. 

Today  business  has  been  elevated  to  a  higher  standard 
and  the  sly  trader  is  generally  discountenanced.  With  the 
best  intentions,  however,  the  business  man  cannot  always 
afford  to  stand  alone  in  the  introduction  of  fairer  and  cleaner 
ethics.  If  he  is  supported  by  others  in  his  field  much  diffi- 
culty and  actual  loss  is  avoided  for  all  concerned.  Co-opera- 
tion is  necessary,  and  co-operation  can  best  be  expressed 
through  a  proper  trade  association. 

The  Public  Interest 

The  association,  which  stands  for  the  new  competition, 
is  squarely  opposed  to  brutally  competitive  methods.     The 


COMPETITION    AND    CO-OPERATION  35 

trade  association  says  that  no  man  has  the  right  to  give  away 
any  goods  to  injure  his  competitors,  or  to  sell  goods  at  less 
than  cost  in  order  to  injure  his  competitors,  or  to  sell  goods  in 
such  a  way — as,  for  instance,  by  giving  bonuses  or  some 
similar  device — as  will  injure  competitors.  Much  of  this 
has  been  prescribed  by  law,  simply  because  some  men  could 
not  appreciate,  without  being  forced  to  do  so,  the  economic 
advantages  of  right  dealing. 

Finally,  the  trade  association  should  take  account  also 
of  the  interests  of  the  consumer.  That  fact  should  be  con- 
sidered by  every  trade  association  in  outlining  its  funda- 
mental policies  of  procedure.  A  trade  association  of  retail 
dealers,  for  example,  should  have  as  prime  objects  the  en- 
forcement of  pure  food  laws;  correct  weights  and  measures; 
sanitary  and  hygienic  conditions;  fair,  frank,  and  straight- 
forward competition;  plainly  marked  prices;  one  price  to  all; 
frankness  of  statement  as  regards  goods ;  no  sales  below  cost ; 
and  no  untrue  advertising  or  statements. 

Better  Business 

The  objection  which  is  raised  by  the  old-fashioned  busi- 
ness man  to  the  above  suggestion  of  an  association  that 
includes  the  consumer  is  the  threadbare  one,  "What's  the 
use?  Father  never  did  business  that  way!  Why  should  I 
include  my  customers  in  my  deliberations?  They  are  all  the 
time  trying  to  get  the  best  of  me  and  never  thank  me  for 
any  favors  I  do  for  them.  Why  shouldn't  I  charge  what  I 
think  a  right  price  and  let  it  go  at  that?" 

A  man  who  argues  in  that  way  would  be  insulted  if  you 
told  him  he  was  advocating  the  ancient  trade  practices  of 
lying,  bartering,  and  scheming,  not  perhaps  on  his  own  part 
but  on  the  part  of  some  of  his  competitors,  to  get  the  better 
of  the  ultimate  consumer.  Business  is  not  done  that  way 
nowadays,    and   such    arguments    are    completely    smothered 


36  TRADE   ASSOCIATIONS 

beneath  the  moss  which  they  have  collected.  With  any  com- 
modity, from  the  producer  of  the  raw  material  to  the  con- 
sumer, everyone  along  the  line  should  be  willing  to  do  his 
part  to  see  that  all  get  a  square  deal  and  a  fair  price. 

Business  is  gradually  moving  in  this  direction  through 
the  assistance  of  the  better  trade  associations.  It  is  not  vain 
to  hope  that  the  day  is  not  far  distant  when  the  archaic 
methods  and  destructive  practices  of  the  old  school  of  busi- 
ness will  have  been  abandoned  if  not  forgotten.  You  cannot 
change  human  nature,  especially  in  a  generation ;  but  progress 
takes  it  steadily  towards  a  higher  level  of  business  ethics. 

It  is  towards  this  goal  that  every  trade  association  should 
strive,  as  an  agency  to  assist  business  to  practice  the  basic 
principle  of  mutual  aid  or  co-operation  by  encouraging  honest 
competition  and  discouraging  everything  which  makes  for 
lower  ideals  and  smaller  prosperity.  Progress  can  be  brought 
about  most  quickly  and  most  fully  through  a  first-class  trade 
association  which  exists  primarily  for  the  purpose  of  building 
a  bigger  and  better  industry,  not  only  for  the  immediate 
welfare  of  the  men  who  comprise  it,  but  for  the  permanent 
advantages  and  benefits  to  all — producer,  distributer,  and 
consumer. 


CHAPTER  IV 

TYPES  OF  ASSOCIATIONS 

Mutual  Trouble  a  Uniting  Force 

The  history  of  the  older  trade  associations  in  this  country 
does  not  show  that  any  were  organized  purely  because  of  a 
general  appreciation  of  the  desirability  and  possibilities  of 
such  an  alliance,  but  rather  because  of  the  necessity  to  meet 
some  common  contingency,  as  for  instance — to  cite  it  again 
— the  crisis  that  caused  the  conversion  of  our  friend  Smith. 
Common  difficulties  or  troubles  on  the  part  of  manufacturers 
or  merchants  have  for  the  most  part  brought  about  their 
union  in  a  common  cause,  perhaps  for  a  cjuite  temporary 
object.  The  outcome  of  such  unity  of  effort,  however,  is 
very  often  the  organization  of  a  permanent  trade  associa- 
tion. 

Example  of  Amalgamation 

The  recent  war  and  the  requirements  of  the  War  Indus- 
tries Board  were  the  direct  cause  of  the  alliance  of  a  great 
many  of  these  associations  of  previously  unacknowledged  re- 
lationship and  their  concurrence  about  matters  of  common 
interest. 

For  example,  in  the  paper  industry  when  the  government 
thought  that  it  would  be  necessary  to  take  over  all  the 
chlorine  for  war-gas  purposes,  every  industry  connected  with 
the  production  of  the  printed  page  was  affected.  Chlorine 
is  necessary  for  bleaching  purposes.  All  white  paper  is  more 
or  less  bleached  and  none  in  the  industry  cared  to  deal  in  an 
unbleached  product  for  writing  and  printing.  Therefore  the 
producer  of  pulp,  the  maker  of  paper,  the  converter  of  paper, 

37 


38  TRADE   ASSOCIATIONS 

the  merchandiser,  the  prhiter,  and  the  stationer  united  in 
presenting  their  claims  before  the  War  Industries  Board. 
Fortunately,  the  signing  of  the  armistice  made  definite  action 
unnecessary ;  but  the  point  to  be  noted  is  that  when  a  matter 
came  up  which  affected  them  all  every  branch  of  the  paper 
industry  was  made  to  realize  that  in  some  things  they  cer- 
tainly had  interests  in  common. 

To  Eliminate  Bad  Practices 

Very  often,  however,  trade  associations  are  organized  for 
the  purpose  of  correcting  some  internal  trade  abuse  rather 
than  for  meeting  an  external  condition.  There  is  not  an 
industry  in  this  country  which  has  not  within  itself  some 
undesirable  practice  that  should  be  reformed,  or  which  does 
not  have  to  operate  under  some  legislation  that  should  be 
corrected. 

In  the  founding  of  the  Eastern  States  Retail  Lumber 
Dealers  Association  we  have  a  good  illustration  of  an  indus- 
trial exigency  that  has  caused  the  formation  of  an  association. 
It  was  a  rather  prevalent  custom  in  the  lumber  industry  for 
wholesale  dealers,  after  stocking  the  retail  dealer,  to  discover 
the  retail  dealer's  local  customers  and  sell  directly  to  them. 
The  wholesaler,  of  course,  was  able  to  offer  prices  with  which 
the  retail  dealer  could  not  possibly  compete  and  so  the  latter 
was  deprived  of  his  business.  The  retail  lumber  dealers, 
threatened  with  extinction,  felt  that  some  defensive  effort  must 
be  made  on  their  part  if  they  were  to  remain  in  existence. 
Eventually,  and  as  a  result  of  their  endeavor  to  meet  the 
common  exigency,  a  permanent  organization  of  retail  dealers 
was  formed. 

The  retailers,  of  course,  had  a  legitimate  right  to  exist. 
They  constituted  a  necessary  step  in  the  process  of  distribu- 
tion and  could  do  things  which  the  wholesalers  could  not  do, 
or  could  not  do  so  well.     By  getting  together,  the  retailers 


TYPES    OF   ASSOCIATIONS  39 

were  able  to  present  their  case  adequately  and  to  put  their 
business  on  a  sound  and  lasting  footing.  In  this  way,  the 
original  cause  for  organizing  has  been  fully  and  satisfactorily 
met,  and  the  association  is  now  going  on  to  correct  other 
trade  abuses  and  to  do  work  which  was  undreamed  of  in  the 
beginning. 

An  even  more  striking  instance  is  afforded  by  still  another 
group  of  retail  dealers.  Confronted  by  a  demoralized  market 
through  malpractice  in  selling  methods,  these  dealers  organ- 
ized themselves  into  an  association  in  the  hope  of  remedying 
conditions.  Prices  below  cost  were  about  to  put  them  all 
out  of  business  and  to  deprive  the  consumer  of  his  most 
useful  source  of  supply.  In  their  desperation  this  group  of 
retail  merchants  became  panic-stricken  and  without  regard  to 
law  or  reason  they  agreed  to  maintain  certain  prices,  which 
led  properly  to  a  federal  injunction.  The  point  to  be  noted 
is  that  their  association,  however,  survived  the  injunction. 
The  merchants  who  had  gone  into  it  had  come  to  recognize 
the  advantages  of  a  trade  association  that  should  operate 
within  legal  limits,  and  therefore  they  kept  the  organization 
intact.  Today  it  is  a  successful  association  fulfilling  various 
functions  and  above  all  still  meeting  its  initial  purpose  by 
means  of  an  educational  campaign. 

There  has  been  no  uniformity  in  the  initial  causes  of  the 
organization  of  the  older  trade  associations.  Like  "Topsy," 
a  great  many  of  them  just  grew,  and  the  rest  found  their 
beginnings  under  circumstances  so  nebulous  and  indefinite 
that  the  direct  reason  or  source  of  their  origin  is  not  ob- 
tainable. 

New  Associations 

Today  the  situation  is  changing.  A  number  of  the  trade 
associations  recently  organized  or  now  in  contemplation  have 
had  their  inception  through  the  observation  on  the  part  of 


40  TRADE   ASSOCIATIONS 

manufacturer  or  merchant  of  the  successful  working  of  an 
association  in  some  other  line. 

With  so  many  impressive  illustrations  of  successful  trade 
associations  to  pattern  upon  it  is  not  difficult  today  for  trade 
leaders  to  plan  an  association  definitely  along  recognized 
lines.  Through  a  direct  organizing  campaign  they  can  rouse 
the  interest  of  the  manufacturers  of  an  industry,  educate 
them  in  the  advantages  of  co-operative  effort,  and  create  their 
association.  The  National  Harness  Makers  Association  em- 
ploys a  professional  organizer  who  travels  throughout  the 
United  States,  visiting  sections  in  which  there  are  a  number 
of  harness  makers.  By  means  of  a  correspondence  campaign 
these  manufacturers  have  been  informed  of  the  existence  of 
the  national  association  and  the  many  benefits  of  membership 
therein.  They  have  been  advised  further  of  the  day  on 
which  they  may  expect  a  visit  from  a  representative  of  the 
association.  This  representative  brings  together  the  various 
local  representatives  of  the  trade  and  they  discuss  the  forma- 
tion of  a  local  association.     Usually  his  efforts  are  successful. 

Because  of  the  large  number  of  trade  associations  now  ill 
existence  and  their  wide  diversity,  sharp  lines  of  classification 
are  not  easily  drawn.  For  convenience  we  may  here  group 
them  in  three  ways,  according  to : 

1.  Industrial  scope 

2.  Geographical  extent 

3.  Legal  form 

I.  Industrial  Scope — Associations  Covering  Entire  Industries 

The  effort  to  cover  the  entire  field  of  an  industry  might 
well  result  in  an  association  which  would  be  so  large  as  to 
be  unwieldy.  For  instance,  it  would  be  impossible  to  have 
a  national  association  which  would  serve  in  detail  every 
Dranch  of  the  lumber  industry.  It  could  be  done,  but  the 
result  would  not  be  practical  or  satisfactory.     The  organiza- 


TYPES   OF  ASSOCIATIONS  41 

tion  which  would  have  to  be  formed  would  be  so  large  as  to 
be  top-heavy  and  impersonal,  and  could  not  give  the  members 
the  individual  attention  and  assistance  which  are  required 
for  enthusiastic  support.  Instead  there  are  a  number  of 
smaller  lumber  organizations  representing  special  lines,  for 
example,  the  Northern  White  Shingle  Manufacturers  Asso- 
ciation. In  some  other  industries,  however,  there  are  asso- 
ciations which  represent  the  entire  industry,  such  as  the 
National  Canners  Association,  the  Heavy  Hardware  National 
Association,  the  National  Metal  Trades  Association,  but  even 
these  have  their  divisional  branches  for  direct  personal  service. 

Special  Associations 

A  majority  of  trade  associations  limit  their  work  to  their 
own  part  of  an  industrial  field,  each  being  a  representative 
of  some  branch  of  the  industry  or  of  a  subdivision  of  the 
trade.  When  we  realize  that  this  is  an  age  of  specialization, 
we  need  hardly  be  surprised  to  find  the  vast  number  of  dis- 
tinct trades  which  exist  today.  To  concentrate  on  the  pro- 
duction of  one  article  alone  and  thus  by  quality  and  quantity 
to  create  a  business  as  great  as  some  of  the  general  indus- 
tries of  former  days  is  a  sign  of  the  times.  The  manu- 
facturer whose  former  output  included  all  kinds  of  boxes 
and  packing  cases  now  may  make  only  cigar  boxes.  The 
continual  subdivision  of  what  was  formerly  a  general  indus- 
try has  necessitated  the  formation  of  organizations  to  cor- 
respond to  the  new  groupings.  The  existence  of  the  Western 
Cigar  Box  Manufacturers  Association  is  a  pertinent  example, 
while  another  illustration  is  the  Tampa-Havana  Cigar  Manu- 
facturers Association. 

Producers  and  Distributers 

That  industry  includes  two  important  operations,  pro- 
duction   and    distribution,    is    one    of    the    fundamentals    of 


42  TRADE   ASSOCIATIONS 

economics.  Sometimes  the  producers  of  an  article  think  that 
they  alone  represent  the  industry,  while  they  are  in  reality 
only  a  part  of  it.  The  activities  of  all  general  allied  or 
specialized  industries  may  be  divided  into  three  groups;  those 
of  tlie  producer,  of  the  jobber,  and  of  the  retailer,  each  of 
which  may  have  its  own  association ;  for  example :  the  Ameri- 
can Hardware  Manufacturers  Association,  the  Southern  Hard- 
ware Jobbers  Association,  and  the  National  Retail  Hardware 
Association. 

The  manufacturer,  the  jobber,  and  the  retailer  have  much 
in  common  to  unite  them  in  one  so-called  "general"  organ- 
ization. On  the  other  hand,  there  are  a  number  of  reasons 
why  they  should  maintain  in  addition  several  organizations 
to  represent  the  separate  interests  of  each  factor.  They  are 
thus  better  able  to  take  care  of  their  own  particular  problems 
and  to  work  intensively  rather  than  extensively.  A  smaller 
group  can  better  co-ordinate  its  efforts  than  a  larger  group, 
and  the  individual  always  appreciates  personal  attention  which 
he  cannot  get  in  a  big  association.  No  man  likes  to  receive 
mimeographed  letters  when  he  can  get  personal  responses  and 
service  from  the  secretary  of  a  smaller  association. 

Interrelated  Associations 

It  is  most  desirable,  on  the  other  hand,  that  these  separate 
associations  which  are  component  parts  of  a  general  in- 
dustrial group  should  in  some  way  be  related  and  united, 
so  that  when  some  matter  of  general  interest  arises  they  may 
all  practice  what  they  preach  to  their  members  by  co-operating 
as  associations  among  themselves.  Particularly  when  an 
association  represents  an  industry  with  many  ramifications 
and  independent  interests  it  is  generally  found  desirable  for 
each  set  of  interests  to  be  drawn  together  into  small  trade 
associations,  and  for  the  small  trade  associations  to  be  mem- 
bers of  a  large  co-ordinating  national  association.     In  other 


types'  of  associations  43 

words,  the  group  associations  are  made  up  of  the  individual 
manufacturers  or  merchants  with  particular  and  common  in- 
terests; whereas  the  large,  national,  industrial  association 
may  be  made  up  entirely  of  group  associations.  By  having 
the  executive  committee  or  board  of  directors  of  the  collective 
association  composed  of  the  presidents  of  the  various  group 
associations,  a  co-ordination  is  brought  about  and  the  in- 
dustry is  thus  unified  and  in  possession  of  an  organization 
which  represents  it  in  all  matters  of  general  common  interest. 
The  American  Paper  and  Pulp  Association  represents  the 
entire  industry.  One  of  its  members  is  the  Tissue  Paper 
Manufacturers  Association,  representing  only  tissue-paper. 
Some  of  these  manufacturers  who  make  or  convert  toilet- 
paper  are  members  also  of  a  Toilet  Paper  Converters  Asso- 
ciation. 

Allied  Lines 

Sometimes  the  interests  of  many  allied  lines  of  business 
are  almost  identical.  The  National  Paint,  Oil  and  Varnish 
Association  represents  a  collection  of  manufacturers  or 
dealers  in  such  varied  lines  as  have  to  do  with  painting  and 
finishing.  Likew^ise  the  National  Cloak  and  Suit  Manufac- 
turers Association  is  an  organization  of  people  w^ho  are 
interested  in  the  production  of  various  articles  for  personal 
use. 

And  so,  where  there  is  a  unity  of  interest  in  any  par- 
ticular allied  lines  of  an  industry,  a  trade  association  is 
formed.  This  is  simply  another  evidence  of  the  fact  that 
where  there  are  common  problems  to  be  met  there  is  a 
tendency  to  unite  and  co-operate. 

2.  Geographical  Extent 

The  large  national  trade  associations  often  contain 
smaller    organizations    which    are    distinctive    only    in    their 


44  TRADE  ASSOCIATIONS 

geographical  limitations.  That  is  to  say,  the  industry  they 
represent  is  nation-wide;  but  a  .number  of  firms  engaged  in 
the  industry  in  some  section  of  the  country  will  organize 
an  association  which  is  especially  representative  of  the  in- 
dustry in  that  section.  The  general  associations  have  their 
national  headquarters,  and  their  various  branches  have  offices 
in  different  parts  of  the  country. 

The  National  Paper  Trade  Association  is  an  example  of 
a  national  association  with  geographical  classifications.  Its 
membership  is  made  up  of  the  New  England  Paper  Merchants 
Association,  the  Northwestern  Paper  Merchants  Association, 
the  Pacific  Coast  Paper  Trade  Association,  and  other  associa- 
tions representing  the  paper  merchants  in  particular  territories. 

The  National  Metal  Trades  Association  is  another  na- 
tional organization,  which  conducts  district  offices  in  Massa- 
chusetts, Rhode  Island,  Connecticut,  New  York,  Pennsylvania, 
Ohio,  Indiana,  Illinois,  Mississippi,  Michigan,  Wisconsin, 
Minnesota,  Georgia  and  even  Canada.  In  this  association 
each  branch  office  operates  directly  as  a  department  of  the 
national  body;  whereas  in  the  National  Paper  Trade  Asso- 
ciation and  other  similar  organizations  each  association 
operates  independently  in  dealing  with  its  own  problems,  but 
co-operatively  in  dealing  with  the  general  problems  of  the 
industry  as  a  whole.  The  Northwestern  Paper  Merchants 
Association  is  a  district,  or  branch,  association. 

Interstate,  District,  or  Local  Associations 

Sometimes  an  organization  is  developed  to  cover  not  a 
single  state  but  portions  of  several  states,  like  the  Penn- 
sylvania, New  Jersey  and  Delaware  Wholesale  Grocers  Asso- 
ciation, or  the  Gulf  Coast  Lumber  Association.  Or,  for 
particular  reasons,  a  purely  local  organization  is  developed 
to  represent  a  national  body  in  a  locality  of  limited  extent, 
as    for   instance,   the   Boston   Stationers   Association,   which 


TYPES   OF   ASSOCIATIONS  45 

represents  a  city;  the  Danbury-Bethel  Fur  Hat  Association, 
which  represents  a  group  of  cities;  or  the  Brooklyn  Hardware 
Dealers  Association,  which  represents  a  section  of  a  city. 

Thus  an  organization  may  be  national,  representing  either 
the  entire  industry  and  all  its  branches  or  the  various  asso- 
ciations of  an  industry;  it  may  be  territorial,  representing 
the  interests  of  an  association  within  a  certain  district;  or 
it  may  be  a  state  or  local  association  and  represent  merely 
the  industry  of  a  state  or  part  of  a  state. 

There  are,  moreover,  two  distinct  geographical  classifica- 
tions :  first,  the  national  association  which  is  made  up  of 
smaller  associations  which  operate  in  their  own  specific 
matters  independently;  and  second,  the  national  association 
which  is  made  up  of  branch  organizations  which  operate 
under  the  direction  only  of  the  national  headquarters. 

When  competitors  are  numerous  it  is  essential  that  a 
well-developed  s}'stem  of  local  district  associations  should 
be  maintained  and  that,  as  in  the  case  of  a  corporation  or 
large  organization,  they  should  conduct  their  affairs  under  the 
direction  of  a  general  manager. 

Whatever  may  be  the  industrial  or  geographical  limits  of 
an  association,  there  is  really  no  limit  to  its  powers  for  co- 
operation. Indeed,  since  the  trade  association  exists  on  the 
principle  that  advantages  are  to  be  derived  from  co-operative 
effort  among  individuals,  it  should  be  willing  to  co-operate 
in  matters  of  common  interest  with  any  and  all  other  related 
trade  organizations.  H  these  matters  are  of  common  and 
pertinent  interest,  such  associations  should  be  willing  to 
co-operate  in  a  regular  and  more  inclusive  association.  This 
makes  for  the  large  national  organization. 

3.  Legal  Form 

As  to  legal  form,  trade  associations  may  be  either  "ordinary 
membership"  bodies  or  incorporated  bodies.    Both  kinds  have 


46  TRADE   ASSOCIATIONS 

advantages  and  disadvantages.  The  membership  association 
needs  no  official  permission  nor  does  its  existence  necessarily 
meet  with  official  recognition.  The  incorporated  association, 
on  the  other  hand,  must  apply  for  legal  sanction  for  register- 
ing its  intended  name,  purpose,  and  powers. 

The  usual  reason  for  the  incorporation  of  membership 
associations  lies  in  the  fact  that  the  unincorporated  associa- 
tion is  incapable  of  holding  real  estate  in  its  association 
name.  An  unincorporated  association  has  no  power  to  re- 
ceive realty  either  by  grant  or  demise.  The  National 
Canners  Association,  which  owns  property  and  conducts  a 
laboratory  in  Washington,  is  incorporated  because  it  owns 
such  property;  likewise  with  other  associations  which  have 
laboratories  or  real  estate  of  their  own. 

Another  inducement  for  incorporation  is  the  limited 
liability  of  incorporated  members  as  compared  with  the  per- 
sonal liability  of  members  of  unincorporated  associations. 
This  is  true  of  the  League  of  Industrial  Rights  and  other 
organizations  which  are  engaged  in  procedure  through  the 
courts. 

Some  associations  incorporate  for  the  purpose  of  carry- 
ing on  the  work  of  a  corporation  in  the  selling  of  service 
through  membership.  In  such  a  case  not  all  members  neces- 
sarily become  stockholders;  indeed,  the  stock  is  sometimes 
held  almost  entirely  by  the  original  incorporators.  The 
stockholders  as  usual  elect  a  board  of  directors.  The  divi- 
dends, if  there  are  any,  are  received  in  reduced  dues  by  the 
stockholders  only.  Incorporation,  however,  is  seldom  neces- 
sary except  where  a  trade  association  must  for  some  particular 
reasons  carry  on  a  regular  business  or  service. 

As  a  general  rule  it  is  not  necessary  for  trade  associations 
to  incorporate,  for  they  would  have  no  particular  reason  for 
holding  property  and  would  not  do  anything  which  would 
make  any  of  their  members  personally  liable   for  damages. 


CHAPTER  V 

ORGANIZING  THE  ASSOCIATION 

The  Name 

When  once  a  trade  association  is  organized  the  first 
thing  to  do  is  to  give  it  a  name — to  hang  out  the  sign  which 
will  inform  people  that  it  has  now  set  up  in  business. 

Naming  an  association  is  not  intrinsically  a  difficult  task 
and  yet  at  this  point  a  great  many  associations  make  their 
first  misstep,  for  it  is  a  misstep  to  give  an  association  an 
abominable  tongue-twister  for  a  name  when  it  could,  just  as 
well  have  been  given  one  which  is  short  and  euphonious. 
The  name  should  be  definite,  representative,  and  as  short  as 
possible — something  which  will  come  easily  to  the  mind  and 
to  the  tongue.  Examples  of  both  good  and  bad  naming  will 
be  found  in  the  list  of  American  trade  associations  given  in 
Appendix  C. 

Aims  and  Purposes 

In  all  cases  an  association  is  organized  to  carry  out  certain 
definite  purposes.  If  it  had  not  certain  purposes  to  fulfil 
it  would  not  exist.  When  it  is  organized  every  association 
should  state  fully  and  plainly,  but  as  simply  and  succinctly  as 
possible,  the  reasons  for  its  existence:  (i)  because  a  definite 
and  complete  statement  outlines  the  program  by  which  the 
association  is  to  proceed;  (2)  because  such  a  statement  affords 
accurate  information  to  anyone  who  desires  to  know  what 
the  principles  are  for  which  the  organization  stands,  or  why 
it  was  called  into  being. 

The  purpose  of  an  association  may  perhaps  be  stated 
briefly  thus: 

47 


48  TRADE  ASSOCIATIONS 

The  purpose  of  this  Association  shall  be  to  encourage 
social  relations  among  its  members  and  to  discuss  any  matters 
of  mutual  interest  to  the (name  of  trade). 

Or  again,  it  may  be  stated  more  fully,  in  this  manner: 

1.  To  gather,  tabulate,  and  disseminate  among  its  mem- 
bers information  concerning: 

(a)  The   supply   of  and   demand   for    in   the 

United  States  of  America. 

(b)  The  supply  of,  demand  for,  and  cost  of  all  materials 

and  commodities  which  enter  into  the  manufac- 
ture of   

(c)  The   quantity   of    imported    into   and   ex- 

ported from  the  United  States,  and  the  countries 
from  which  imported,  and  the  countries  to  which 
exported. 

(d)  The  past  prices  asked  for   

2.  To  establish  uniform  trade  practices,  thus  eliminating 
trade  abuses  unfair  to  manufacturer  and  to  customer. 

3.  To  study,  formulate,  and  advocate  a  correct  and  scien- 
tific system  of  Bookkeeping  and  Cost  Accounting  to  be 
adopted  by  its  members  and  all  other  manufacturers 
of 

4.  To  keep  advised  as  to  all  matters  which  may  affect  the 
welfare  of  the  industry  and  to  inform  the  members  thereof. 

5.  To  collect  and  disseminate  to  members  all  information 
with  respect  to  laws,  rules,  and  regulations  of  the  United 
States  and  of  foreign  countries  that  may  pertain  to  the 
various  materials  and  commodities  entering  into  the  manu- 
facture of and  to  the  machinery  used  for  its 

manufacture. 

6.  To  promote  the  use  of  the  product  manufactured  by 
its  members. 

7.  To  encourage  and  promote  discussion  and  study  of 
economic  principles  and  of  questions  affecting  the  industry ; 
but  the  purposes  of  this  Association  and  the  procedure  which 
may  be  adopted  in  the  accomplishment  thereof,  shall  in  no 
way  conflict  with  any  Federal  or  State  law  of  the  United 
States  of  America. 


ORGANIZING    THE    ASSOCIATION  49 

One  of  the  best  fornuilations  of  the  purposes  of  a  trade 
association  is  that  of  the  United  Typothetae  of  America,  who 
set  forth  in  their  certificate  of  incorporation  the  following 
reasons  for  their  existence: 

To  Foster  Trade  and  Commerce 

To  foster  trade  and  commerce  in  the  printing  industry; 
to  reform  abuses  relative  thereto ;  to  protect  trade  and  com- 
merce from  unjust  and  unlawful  exactions;  to  diffuse  ac- 
curate and  reliable  information  among  its  members  as  to  the 
standing  of  merchants  and  other  matters;  to  promote  uni- 
formity and  certainty  in  the  customs  and  usages  of  said 
trades  and  commerce,  and  of  those  having  a  common  trade, 
business,  or  financial  interest;  to  settle  differences  and  pro- 
mote a  more  enlarged  and  friendly  intercourse  among  its 
members  and  between  its  members  and  the  business  world; 
and  in  general  to  do  such  other  and  further  lawful  acts  as 
may  be  found  necessary  and  convenient. 

Encourage  Friendship 

To  encourage  and  foster  a  feeling  of  friendship  between 
employing  printers  and  allied  employing  trades;  to  devise 
ways  and  means  for  bettering  the  condition  and  advancing 
the  interests  of  the  industry  in  general;  to  spread  this  in- 
fluence internationally  through  the  establishment  of  local  or 
sectional  associations ;  and  to  develop  a  spirit  of  co-operation 
in  all  matters  of  mutual  interest. 

Encourage  High    Standards 

To  effect  a  thorough  organization  of  the  employing 
printers  and  allied  employing  trades  of  the  United  States, 
Canada,  and  Mexico,  with  a  view  to  improving  the  condition 
of  the  industry  in  every  proper  and  lawful  manner;  to  en- 
courage a  high  standard  of  proficiency ;  to  promote  the  in- 
terests of  the  printing  business  in  all  its  branches;  to  maintain 
among  its  members  a  just  and  equitable  method  of  conducting 
said  business ;  and  to  meet  at  stated  periods  for  the  discussion 
and  dissemination  of  reliable  information  relative  to  the  best 


50  TRADE   ASSOCIATIONS 

methods  of  conducting  business  from  the  standpoint  of  prac- 
tical experience  and  of  approved  business  ethics. 

Eliminate  Evils  of  Ignorant  Competition 

To  urge  employing  printers  and  allied  employing  trades 
to  co-operate  with  one  another;  to  eliminate  the  evils  of 
ignorant  and  ruinous  competition ;  to  make  the  relationship 
of  the  entire  printing  trades  harmonious;  and  to  correct 
such  further  evils  as  may  exist. 

Knov^ledge  of  Costs 

To  gain  a  w^ider  knowledge  of  the  elements  of  cost,  and 
of  what  constitutes  a  proper  remuneration  for  services 
rendered,  to  the  end  that  competition  may  be  honorable, 
just,  and  reasonable. 

Establish    Relations   with    Labor 

To  enable  such  members  as  may  so  desire  to  form 
divisions  for  the  purpose  of  making  contracts  with  labor 
unions,  a  copy  of  every  such  contract  to  be  transmitted  to 
the  Secretary  of  this  Association,  for  general  information. 
To  enable  members  who  may  so  desire  to  operate  open  or 
non-union  shops ;  to  maintain  labor  bureaus ;  and  to  enable 
members,  or  such  of  them  as  may  so  desire,  to  unite  in  the 
protection  of  their  interests  in  any  way.  No  existing  con- 
tracts to  be  affected  by  the  above  clause.  Each  division  may 
levy  upon  its  members  such  additional  dues  for  the  special 
work  of  such  division  as  may  be  required:  Provided,  how- 
ever, that  such  dues  shall  be  subject  only  to  the  control  of 
the  division. 

No  Control  of  Prices 

This  Association  shall  not  at  any  time  attempt  to  regulate 
its  entire  membership  in  the  matter  of  labor  control  or 
prices  of  printing.  Any  division  of  the  Association,  either 
local  or  international,  may  regulate  the  affairs  of  such 
division. 


ORGANIZING   THE   ASSOCIATION  5 1 

Cost-Finding  System 

To  employ  competent  men  to  install  the  Standard  Uniform 
Cost-Finding  System  as  approved  and  amended  from  time  to 
time  by  the  Cost  Commission;  to  secure  uniformity  in  the 
application  of  the  system  in  the  plants  of  its  members;  to 
urge  its  adoption  in  all  printing  plants  everywhere,  and  by 
all  the  allied  industries. 


Credit  Bureaus 

To  maintain  credit  bureaus  for  the  collection  and  dis' 
semination  of  credit  information;  to  keep  on  record  for  the 
use  of  all  subscribing  members  information  regarding  the 
credit  and  methods  of  buyers  that  may  be  of  value  to 
members. 

Legislative  Committees 

To  create  legislative  committees,  both  local  and  interna- 
tional, for  the  purpose  of  watching,  promoting,  and  further- 
ing the  legitimate  interests  of  the  industry. 

Mutual  Insurance 

To  foster  and  further  the  formation  of  mutual  insurance 
companies. 

Code  of   Ethics 

To  standardize  a  code  of  ethics  and  trade  customs  for 
the  guidance  of  its  members  in  their  dealings  with  each 
other  and  with  their  customers. 

Trade  Relations 

To  establish  better  trade  relations  between  individual 
printers,  between  printers  and  other  allied  interests,  and 
between  all  the  interests  involved  in  the  furtherance  of  the 
general  welfare  of  the  Association. 


52  TRADE   ASSOCIATIONS 

Arbitration    Boards 

To  provide  Boards  of  Arbitration,  local  and  international, 
to  which  may  be  referred  for  adjustment  problems  within 
the  Association,  methods  of  competitors,  and  questions  aris- 
ing between  members  and  their  customers. 

Locals 

To  form  local  branches  in  various  cities  and  towns 
throughout  the  country. 

To  employ  the  persons  necessary  for  carrying  out  the 
work  of  organization  in  general. 

Industrial  Relations 

To  conduct  an  industrial  relations  department,  and  such 
other  departments  as  may  be  necessary  for  carrying  out  the 
general  objects  and  purposes  of  the  association. 

Not  for  Profit 

That  the  purpose  of  the  Association  in  carrying  out  the 
objects  as  herein  set  forth  shall  not  be  profit,  but  shall  be 
service,  and  the  promotion  and  development  of  the  printing 
industry  in  all  its  branches. 

Code  of  Ethics 

A  trade  association  having  determined  upon  its  reasons 
for  existence  may  well  then  set  up  a  standard  or  code  of 
ethics  under  which  it  is  to  operate.  We  all  as  individuals 
may  have  life,  but  if  we  are  to  amount  to  anything  we  also 
must  have  a  plan  for  living;  otherwise  we  merely  exist  and 
come  to  no  good  end.  A  trade  association  should  have  certain 
ideals  which  it  should  ever  struggle  to  attain.  Here  also  the 
example  of  the  United  Typothetae  of  America  is  worthy  of 
note.  They  have  enunciated  a  statement  of  ideals  which 
is  the  best  that  can  be  found  in  a  search  through  the  outlines 
of  purposes  or  plans  of  trade   associations  in  this  country 


ORGANIZING^ THE   ASSOCIATION  53 

or  abroad.  This  code  of  ethics  is  so  complete  and  wide^ 
it  sets  so  high  an  ideal — one  towards  which  any  trade  asso- 
ciation, with  due  modification  to  suit  its  own  industry,  may 
work — that  it  is  cjuoted  here  in  full: 

Of  Our  Duty  to  Ourselves 

1.  The  code  of  ethics  best  calculated  to  elevate  the  status 
of  employing  printers  must  be  evolved  by  the  development 
of  moral  and  intellectual  manhood.  We  should,  therefore, 
resolve  to  test  every  transaction  by  the  standard  of  truth 
and  justice. 

2.  Take  advantage  of  no  man's  ignorance,  and  see  that 
employees  are  truthful  and  straightforward,  and  do  not 
misrepresent  nor  overcharge  the  confiding. 

3.  It  is  an  absolute  essential  in  honorable  competition 
that  v/e  prove  ourselves  as  honorable  in  every  particular  as 
we  would  have  our  competitors. 

4.  Mix  freely  with  the  intelligent  and  honorable  members 
of  the  craft,  and  study  their  ways  and  methods,  and  endeavor 
to  get  a  reputation  in  the  community  as  an  intelligent,  honest, 
first-class  printer,  whom  people  can  trust  with  their  work 
without  competitive  bidding. 

5.  Every  printing  establishment  should  have  a  perfect 
system  of  ascertaining  the  actual  cost  of  every  job.  It  is 
in  this  way  only  that  the  business  can  hope  to  be  relieved 
from  the  deleterious  effects  of  guess  prices.  Such  a  system 
should  not  only  ascertain  the  facts,  but  record  them,  so  that 
they  can  be  referred  to  understandingly,  and  the  information 
immediately  ascertained. 

6.  No  establishment  should  be  satisfied  with  anything 
except  the  most  exact  and  systematic  bookkeeping,  and  all 
work  should  be  checked  up  and  charges  proved  before 
delivery,  and  the  following  made  a  standing  rule :  Never 
permit  a  charge  to  be  entered  on  the  books  that  cannot  be 
proved  by  competent  evidence  in  a  court  of  justice  to  be  a 
fair  competitive  price. 

7.  The  expense  of  doing  business,  such  as  the  wear  and 
tear  of  material,  interest  on  money  invested,  bad  debts,  rents, 
taxes,  insurance,  bookkeeping,  and  all  other  items  of  expense. 


54  TRADE   ASSOCIATIONS 

should  be  ever  before  our  eyes,  and  we  should  never  forget 
that  these  must  be  as  surely  levied  on  each  particular  job 
as  its  labor  cost.  Never,  under  any  circumstances,  should 
the  minimum  cost  plus  a  fair  profit  be  departed  from.  We 
should  feel  here  a  double  restraint:  in  the  first  place,  to  cut 
cost  is  foolish;  in  the  second  place,  it  is  wrong. 

8.  On  no  account  consent  to  pay  commissions  to  book- 
keepers, secretaries,  or  others  w^ho  have  wrork  to  give  out. 
It  is  demoralizing  to  both  the  giver  and  the  taker.  Money 
is  passed  without  a  proper  equivalent.  The  agent  is  selling 
something  he  has  no  right  to  sell,  and  unless  the  printer 
has  a  better  conscience  than  is  ordinarily  met  with,  the  com- 
mission is  added  to  the  bill  and  the  customer  pays  more  than 
he  should. 

Of  Our  Duty  to  Each  Other 

9.  When  a  young  competitor  enters  the  ranks,  welcome 
him  as  a  new  soldier  to  the  field,  and  help  him  to  any 
information  and  assistance  which  will  enable  him  to  over- 
come the  difficulties  we  had  so  much  trouble  in  surmounting. 
Rest  assured  you  can  make  no  better  investment  of  the  time 
necessary  to  do  so,  as  his  gratitude  for  the  kindly  considera- 
tion will  often  cause  him  to  repay  you  in  fourfold  way  and 
where  you  would  often  least  anticipate  it. 

ID.  It  should  be  a  duty  and  pleasure  to  impart  to  our 
less  experienced  competitors  the  knowledge  we  possess,  so 
long  as  we  are  satisfied  that  the  information  generously 
given  will  be  honorably  used.  In  this  way  the  element  of 
ignorance,  which  does  so  much  to  demoralize  the  craft,  may 
be  partially  eliminated  and  one  of  the  most  dangerous  factors 
of  competition  destroyed.  Remember  that  knowledge  kindly 
imparted  makes  a  business  friend  of  one  who  would  probably 
otherwise  become  a  business  foe. 

II.  The  young  employer  who  starts  with  a  small 
capital,  and  does  most  of  his  own  work,  should  ever  remem- 
ber the  honorable  nature  of  his  calling,  and  never  make  the 
mistake  of  supposing  that  because  he  does  his  own  work 
he  can  do  it  for  less  than  his  neighbor  who  employs  fifty 
or  more  hands,  with  a  long  list  of  superintendents  and  fore- 


ORGANIZING   THE   ASSOCIATION  55 

men.  He  should  rather  insist  that  the  work  which  he  does 
with  his  own  hands  will  be  better  done,  and  therefore  he 
should  receive  more  for  it. 

12.  When  a  printer  is  offered  work  which  he  cannot  do, 
his  rule  should  be  to  decline  it  and  refer  his  customer  to  the 
office  that  can  do  it,  and  not  accept  the  work  hoping  to  get 
some  neighbor  to  do  it  for  him  and  allow  him  a  commission. 

13.  Make  no  rebates  or  allowances  to  professional  brokers 
or  middlemen.  If  it  is  possible  to  help  a  neighbor  out  of 
an  extra  rush  of  composition  or  presswork,  do  it  cheerfully, 
and  divide  with  him  the  profit  on  the  work.  In  this  way  the 
temptation  to  add  to  the  facilities,  oftentimes  much  too  large 
for  the  work  done  in  a  given  community,  will  very  often 
be  overcome,  as  idle  machinery  makes  it  almost  impossible 
to  maintain  any  standard  of  prices  which  may  be  adopted. 

14.  When  estimates  are  asked  for  by  any  person  on 
work  done  by  another  printer  with  plain  intent  to  find  cause 
for  an  alleged  unfairness  of  the  price  charged,  they  should 
be  invariably  declined.  It  is  not  safe  to  criticize  any  price 
until  one  is  in  possession  of  all  the  facts.  The  work  itself 
will  not  bear  evidence  whether  it  was  done  by  night  or  by 
day,  with  a  few  or  many  alterations;  these  with  many  other 
unknown  conditions  may  have  controlled  the  price. 

15.  In  making  estimates  we  are  shooting  arrows  in  the 
dark,  and  may  unwittingly  wound  some  of  our  best  friends 
when  we  have  least  intended  it.  If  the  aggrieved  person 
thinks  he  has  been  injured  by  an  estimate  which  has  taken 
away  a  valued  customer,  his  proper  course  is  to  seek  an 
explanation,  and  he  should  always  begin  with  the  supposition 
that  the  injurious  price  has  been  made  in  ignorance  of  all 
facts,  by  thoughtlessness  or  by  mistake.  In  most  cases  he 
can  reach  such  an  explanation  as  will  prevent  a  repetition 
of  the  error,  if  ft  does  not  bring  the  lost  work  back. 

Of  Prices  and  Estimates 

16.  Every  establishment  should  have  a  thorough  knowl- 
edge of  what  it  costs  to  produce  the  work  it  sends  out, 
and  should  determine  what  percentage  of  profit  it  will  be 
satisfied  with.    Based  upon  those  two  items,  it  should  estab- 


56  TRADE   ASSOCIATIONS 

lish  its  prices  for  all  work  undertaken,  whether  secured  by 
competitive  bid  or  without  a  price  being  named  in  advance. 

17.  A  master  printer  should  not  make  estimates  for  work 
that  he  cannot  do,  and  when  he  is  devoid  of  experience  in 
certain  branches  of  printing,  should  not  attempt  to  price 
them.  It  is  always  unsafe  and  often  unjust  to  give  prices 
upon  a  class  of  work  for  which  the  cost  is  not  positively 
known  and  has  to  be  guessed  at. 

18.  Always  have  the  courage  to  ask  fair  remuneration  for 
any  work  offered,  resting  assured  that  it  will  be  more  profit- 
able to  be  without  a  job  than  to  secure  one  in  which  there 
is  temptation  to  resort  to  questionable  methods  in  order  to 
avoid  a  financial  loss  in  its  execution. 

19.  Estimates  calling  for  detailed  specifications  of  separate 
value  of  the  paper,  composition,  electrotyping,  presswork, 
ruling,  binding,  etc.,  should  always  be  refused.  These  details 
the  customer  has  no  right  to.  They  are  the  printer's  property, 
and  to  be  swift  in  giving  them  away  is  one  of  the  surest 
methods  of  provoking  unfair  competition. 

20.  When  requested  to  make  estimates  for  work,  or  when 
submitting  proposals  in  answer  to  advertisements,  the  intel- 
ligent printer  should  endeavor  never  to  lose  sight  of  the 
fact  that  the  only  price  proper  to  make  is  the  one  that  he 
would  make  were  the  work  entrusted  to  him  without  any 
estimates  having  been  requested  on  it.  His  estimated  figures 
should  be  made  on  the  basis  of  1,000  ems,  per  token,  and 
per  pound  for  paper  that  he  has  adopted  for  his  minimum 
for  the  class  of  work,  while  carefully  studying  the  subject 
with  the  figures  of  his  previous  year's  business  before  his 
eyes,  and  while  safely  shielded  from  the  exciting  influences 
which  arise  when  the  estimate  fiend  is  so  close  upon  him — 
always  consoling  himself  when  he  loses  the  job  with  the 
thought  that  if  he  had  encumbered  himself  with  the  work 
at  a  low  figure  he  would  have  incapacitated  himself  from 
doing  what  may  presently  come  along  at  a  remunerative  rate. 

21.  A  master  printer  should  always  contend  that  he  is 
entitled,  when  asked  for  an  estimate,  to  know  the  names 
of  all  who  are  to  be  requested  to  bid  on  the  work.  A  glance 
at  the  names  is  often  sufficient  to  show  him  whether  it  is 
worth  the  trouble  to  make  the  necessary  calculations.     He 


ORGANIZING    THE   ASSOCIATION  57 

should  also  insist  upon  his  right,  if  he  desires  it,  to  know 
all  the  prices  offered  for  the  work,  and  to  whom  and  at  what 
prices  it  was  awarded. 

22.  The  man  who  asks  for  a  bid  upon  work,  and  before 
receiving  it  shows  the  figures  made  by  another  bidder,  should 
be  marked;  it  can  be  depended  on,  if  he  will  show  you 
another's  bid  he  will  show  yours  to  a  third  party.  He  wants 
you  to  do  the  job,  if  you  will  do  it  for  less  than  anyone 
else. 

Our  Duty  to  Our  Workmen 

23.  In  the  conduct  of  our  establishment  it  should  be  our 
constant  endeavor  to  elevate  the  moral  character  and 
ameliorate  the  financial  condition  of  our  workmen  who  are 
engaged  with  us.  This  interest  in  their  welfare  is  one  of 
the  best  methods  of  preventing  strikes  and  lockouts,  which 
do  such  untold  damage  to  both  the  proprietor  and  the 
journeymen. 

24.  While  it  should  be  the  firm  and  unalterable  determina- 
tion of  every  printer  not  to  be  dictated  to  by  labor  organiza- 
tions when  their  demands  are  unfair,  or  which  substitute 
the  will  of  a  prejudiced  majority  for  the  conservative  teach- 
ings of  common  sense  and  justice,  we  should  be  slow  to 
condemn  the  action  taken  by  the  journeymen,  as  it  is  possible 
that  the  influences  controlling  them  may  be  more  than  they 
are  able  to  resist. 

25.  Any  action  which  tends  to  decrease  the  rate  of  wages 
should  be  looked  upon  with  as  much  distrust  as  is  an  effort 
to  increase  them.  We  should  always  remember  that  the 
proper  place  for  us  to  look  for  remuneration  is  from  the 
business  we  do  at  a  legitimate  profit,  and  not  from  what  we 
can  save  on  the  per  diem  of  the  wage  worker,  or  from 
what  we  can  make  out  of  each  other. 

26.  In  the  treatment  of  apprentices  or  boys  who  are  in 
our  employ  we  should  be  ever  careful  as  to  whose  hands 
they  are  in,  as  they  are  often  influenced  for  good  or  for 
bad  by  the  example  of  the  foreman  under  whom  they  work. 

27.  When  an  apprentice  is  taken,  it  should  be  considered 
our  duty,  if  he  prove  unapt  or  unteachable,  to  advise  him 


58  TRADE   ASSOCIATIONS 

to  seek  another  line  of  trade.  It  often  occurs  that  a  poor 
printer  would  have  made  a  good  blacksmith  or  shoemaker; 
therefore,  either  trade,  as  well  as  the  boy,  would  be  benefited 
by  taking  him  away  from  the  trade  for  which  he  is  unfitted. 
28.  When  we  conclude  that  the  apprentice  we  have  taken 
is  competent  to  learn  the  business  and  that  he  will  learn  it 
in  such  a  manner  as  to  reflect  credit  upon  those  who  taught 
him,  as  well  as  himself,  no  effort  should  be  spared  to  make 
him  all  he  should  be  as  a  workman  and  a  good  citizen.  By 
so  doing  we  add  to  our  own  happiness,  to  his  prosperity,  and 
help  the  future  generation  of  employing  printers  along  a 
very  troublesome  road. 

Membership 

Membership  is  the  most  important  matter  with  regard  to 
the  internal  organization  of  a  trade  association.  The  repre- 
sentativeness of  an  association  is  directly  dependent  upon  the 
number  of  its  members  and  the  nature  of  the  restrictions 
attending  their  admission.  It  is  therefore  desirable  that 
definite  qualifications  for  membership  be  stated,  thus  elim- 
inating any  personal  prejudices  for  or  against  a  candidate. 
The  trouble  with  a  great  many  associations  is  that  they  do 
not  define  their  memberships  clearly;  and  when  once  they 
let  down  the  bars  they  become  big,  heterogeneous,  unwieldly 
bodies  made  up  of  varying  minds  and  productive  only  of 
unsatisfactory  results. 

While  a  trade  association  should  in  no  sense  be  exclusive, 
it  should,  if  it  is  to  be  fully  representative  and  of  a  desired 
quality,  require  from  its  members  certain  standards  and 
qualifications.  The  constitution  or  by-laws  of  most  associa- 
tions divide  the  membership  into  three  or  four  classes,  each 
of  which  possesses  slightly  different  privileges.  Memberships 
are  commonly  grouped  in  the  following  classifications : 
active,  associate,  honorary,  and  sometimes  affiliated.  Though 
other  bases  of  classification  exist,  these  are  most  commonly 
found. 


ORGANIZING    THE   ASSOCIATION  59 

Active  Membership.  Active  membership  is  usually  under- 
stood to  include  representatives  of  firms  or  corporations 
actually  engaged  in  the  specific  industry  or  phase  of  industry 
suggested  by  the  title  and  purpose  of  the  association.  To 
these  members  are  extended  the  fullest  privileges  of  member- 
ship. They  may  enjoy  the  social  and  economic  benefits  of 
the  association,  and  they  possess  the  right  to  vote,  to  hold 
office,  and  to  serve  on  committees. 

Associate    Meniberskip.      Associate    membership    on    the 
other  hand  is  generally  extended  to  include  representatives 
of  concerns  indirectly  engaged   in  such  fields.     By  way  of 
example,  an  association  of  retail  hardware  dealers  would  have 
a  trade  association  of  their  own  of  which  they  themselves 
would  be  the  active  members,  while  the  associate  members 
would   be   the   jobbing   and   manufacturing   interests   in   the 
hardware  lines.    Again,  in  an  association  of  piano  merchants, 
active  members  would  be  the  merchants  themselves  or  their 
representatives,  while  those  engaged  in  any  other  branch  of 
the  musical  industry  might  be  termed  "associate"  members. 
Associate  members   are   restricted   from   voting  at   meetings 
or   from  holding  office,  but  may  by  a  special   vote   act  on 
committees.     They  are  entitled  to  all  other  special  privileges. 
Honorary  Membership.    When  a  member  has  ceased  from 
active  participation  in  an  association  because  of  retirement 
from  business  or  of  change  of  position,   and  has   rendered 
distinguished  service  either  to  the  association  or  to  its  inter- 
ests, he  may  be  accorded  the  rank  of  an  honorary  member. 
The  status  of  the  honorary  member  is  the  same  as  that  of 
the  associate  member  except  for  the  fact  that  he  is  exempt 
from  the  payment  of  any  dues  or  fines. 

Affiliated  Membership.  Some  national  associations  have 
v/hat  are  known  as  "affiliated"  members:  that  is,  any  state 
or  local  association  may  become  affiliated  with  the  national 
association  after  the  approval  of  application   for  admission 


6o  TRADE^ASSOCIATIONS 

to  membership.  Delegates  are  then  appointed,  usually  on  the 
basis  of  membership,  to  represent  the  affiliated  association. 
As  these  appointees  are  offered  all  the  rights  and  privileges 
of  active  members,  they  really  should  be  considered  in  the 
same  class.  Some  national  associations  will  accept  no  direct 
members  from  a  section  in  which  there  are  affiliated  organ- 
izations. 

For  instance,  a  manufacturer  could  not  join  the  National 
Metal  Trades  Association  and  refuse  to  be  identified  with 
its  local  association  in  his  district.  No  book-paper  manu- 
facturer can  join  the  American  Paper  and  Pulp  Association; 
he  must  join  the  affiliated  Book  Paper  Manufacturers  Asso- 
ciation, which  is  itself  a  member  of  the  American  Paper  and 
Pulp  Association.  Thus  the  individual,  without  extra  expense 
(all  is  included  in  his  membership  in  the  affiliated  association), 
receives  the  benefits  of  the  large  national  association,  which, 
since  it  is  composed  only  of  affiliated  organizations,  has  no 
individual  members. 

Applications  and  Election 

The  application  for  membership  is  generally  made  in 
written  form,  and  the  qualifications  of  the  applicant  should 
be  carefully  examined  by  the  officers  or  by  the  executive 
committee.  A  new  member  should  be  elected  to  membership 
in  an  association  only  upon  the  recommendation  of  an  execu- 
tive or  membership  committee.  When  a  committee  recom- 
mends a  company  for  membership  that  fact  should  mean 
that  it  has  obtained  all  possible  information  about  the  appli- 
cant and  considers  that  the  company's  product,  its  manner 
of  conducting  business,  and  its  intentions  are  such  as  to 
make  it  a  worthy  addition  to  membership  in  the  organization. 

Upon  formal  recommendation,  a  vote  is  taken  by  the 
association  in  meeting  assembled  and  the  applicant  nearly 
always  is  elected;  for  usually  associations  appreciate  the  ad- 


ORGANIZING    THE   ASSOCIATION  6l 

vantage  of  an  extensive  representation  and  know  that  no 
one  would  be  recommended  by  the  committee  and  the  officers 
of  the  association  unless  he  was  desirable.  In  most  asso- 
ciations it  is  generally  known  beforehand  whether  or  not 
an  applicant  will  be  acceptable.  If  it  is  not  perfectly  certain 
that  he  will  be  acceptable,  his  name  is  seldom  brought  before 
the  members  for  election. 

The  election  of  associate  members,  however,  is  an  entirely 
different  matter.  When  electing  them  great  care  should  be 
taken  to  be  certain  that  the  applicant  is  a  legitimate  factor 
in  the  industry.  Thus  an  association  of  retail  dealers  might 
specify  that  no  hardware  jobber  shall  be  admitted  as  an 
associate  member  unless  he  sells  strictly  at  wholesale.  The 
proposed  member  is  often  expected  to  indorse  the  policy  of 
the  association  before  he  is  accepted. 

The  question  of  the  number  of  ^■otes  which  applicants 
must  receive  to  become  members  ^■aries  in  different  associa- 
tions; but  as  a  rule  they  simply  require  a  majority  vote  and 
the  majority  vote  usually  becomes  unanimous. 

Undesirable  Applicants 

An  applicant  for  membership  may  seem  undesirable  to  the 
committee  that  examines  his  application  and  to  the  member- 
ship at  large,  but  it  should  always  be  borne  in  mind  that  a 
member  in  the  association  is  much  more  susceptible  to  reform 
measures  if  they  are  necessary  than  a  man  outside.  Con- 
sequently many  organizations  elect  to  their  membership 
persons  who  may  not  at  the  time  seem  wholly  desirable,  for 
the  purpose  of  educating  them  by  letting  them  associate  with 
men  of  bigger  and  more  constructive  vision  and  experience 
and  thus  absorb  larger  and  broader  ideas.  This  plan  works 
successfully  with  most  men,  and  often  a  man  with  a  narrow^ 
confined  point  of  view,  merely  by  rubbing  elbows  and  ex- 
changing ideas  with  other  men,  broadens  out  and  becomes 


62  TRADE   ASSOCIATIONS 

an  asset  to  the  industry.  Now  and  then  men  have  such  hard 
shells  that  they  cannot  be  penetrated  or  changed  in  the  least; 
but  as  a  rule,  even  if  a  man  does  not  in  every  respect  measure 
up  to  requirements,  it  is  desirable  to  elect  him  to  the  asso- 
ciation in  the  hope  that  by  environment  and  education  he 
may  be  induced  to  do  business  on  a  better  and  more  ethical 
basis. 

One  certainly  v^ould  not  expect  to  teach  Americanization 
by  sending  missionaries  to  Europe.  We  do  it  by  admitting 
immigrants  to  this  country  and  then  teaching  them  after  they 
get  here  the  principles  of  American  citizenship.  Likewise, 
we  cannot  inculcate  in  a  man  the  advantages  of  co-operation 
and  the  higher  ethics  of  business  by  merely  calling  on  him 
and  arguing.  He  may  be  convinced  that  we  are  right  and 
thus  be  willing  to  join  an  association,  but  his  conversion  and 
unconscious  reformation  are  a  matter  of  personal  contact 
and  absorption  which  takes  patience  and  time  on  his  part 
and  on  that  of  the  other  members. 


CHAPTER  VI 

ASSOCIATION  ROUTINE 

Dues  and  Assessments 

Some  associations  receive  their  financial  means  for  carry- 
ing on  their  work  by  initiation  fees  and  periodical  dues  or 
assessments. 

A  fixed  sum  should  be  set  as  the  fee  or  annual  dues  of 
a  member.  The  amount  selected  is  generally  $ioo,  although 
in  some  trade  associations  where  the  membership  is  com- 
posed of  small  factors  the  dues  are  much  less.  The  assess- 
ment in  an  association  is  usually  made  upon  some  basis, 
perhaps  of  tonnage  or  feet,  which  applies  especially  to  the 
particular  industry.  The  best  basic  medium  to  use,  however, 
is  gross  sales  reckoned  in  dollars.  A  dollar  means  the  same 
thing  to  all  members,  whereas  a  yard  of  silk  may  represent 
various  values,  or  a  hundred  feet  of  lumber  may  be  of  differ- 
ent grades  and  values.  The  man  who  produces  a  small  amount 
of  high-grade  silk  and  sells  it  at  a  high  price  with  large 
annual  profit  would,  on  a  commodity  basis,  pay  a  smaller 
assessment  than  a  member  who  produces  a  large  amount  of 
low-grade  silk  and  sells  it  at  a  low  price,  with  smaller  annual 
profit. 

The  association  exists  for  its  effect  on  profits  and  there- 
fore profits,  or  dollars,  should  be  the  basis  of  assessment. 
The  man  who  has  had  the  larger  sales  in  dollars  should  have 
made  the  larger  profits  and  therefore  should  pay  the  larger 
assessment  to  the  association,  since  he  must  be  convinced 
that  the  service  of  the  association  has  helped  make  possible 
his  large  sales. 

63 


64  TRADE   ASSOCIATIONS 

If  a  large  national  association  is  made  up  of  affiliated 
associations  these  generally  make  a  fixed  annual  contribution 
for  the  support  of  the  large  organization.  As  the  presidents 
of  each  of  the  affiliated  associations  are  members  of  the 
executive  committee  of  the  large  organization,  the  executive 
committee  determines  what  would  be  a  fair  contribution  from 
the  allied  associations. 

Dues — Active  Membership 

Active  members  should  report  gross  sales  in  dollars  to  the 
association  quarterly.  Each  member's  total  assessment  can 
then  be  based  upon  his  total  annual  gross  sales.  This  makes 
the  expense  equitable;  in  other  words,  the  large  companies 
pay  the  larger  assessment  and  the  small  companies  pay  the 
smaller  sum. 

Bills  for  dues  and  assessments  should  generally  be  rendered 
quarterly  or  semiannually,  and  members  should  be  urged  to 
pay  promptly.  It  does  not  make  an  assessment  seem  quite 
so  large  when  it  is  thus  divided  into  four  parts.  If  an 
association  is  conscientiously  doing  its  full  part,  and  the  mem- 
bers believe  in  it,  there  will  never  be  any  delay  in  collecting 
funds. 

Dues — Associate  Membership 

According  to  the  requirements  of  some  associations, 
associate  members  pay  a  higher  rate  of  dues  than  active 
members.  The  reason  for  this  lies  in  the  attitude  of  active 
members  towards  associate  members.  On  the  principles  of 
self -protection  active  members  feel  that  their  own  interests 
are  of  paramount  importance,  and  therefore  that  the  lighter 
the  restrictions  imposed  upon  them  the  greater  is  the  assur- 
ance of  true  representation.  Since  associate  membership  is 
regarded  more  or  less  as  a  privilege  whereby  the  interests  of 
outsiders  may  be  protected,  higher  fees  and  assessments  are 


ASSOCIATION    ROUTINE  65 

levied  upon  associate  members.     This  arrangement,  however, 
does  not  always  prove  satisfactory. 

When  some  special  service  is  conducted  in  an  association, 
such  as  credit,  collection,  or  transportation  bureaus,  an  addi- 
tional charge  is  sometimes  made  for  subscriptions  to  such 
service,  or  a  moderate  fee  is  asked  for  actual  work  performed. 

Budget 

As  every  association  should  have  a  budget,  the  sum  total 
of  the  dues  can  be  subtracted  from  the  total  of  the  budget 
and  then  the  residue  prorated  as  an  assessment  among  the 
members,  based  upon  whatever  medium  is  selected. 

In  creating  a  budget  for  an  association  sufficient  funds 
should  always  be  provided  for  the  full  and  complete  operation 
of  the  association.  It  is  a  most  unfortunate  condition  for  an 
association  to  have  to  abandon  vital  work  because  of  a  lack 
of  financial  support.  But  as  the  work  of  the  association 
progresses  and  it  renders  increasing  service  to  the  members, 
the  question  of  a  budget  will  become  of  secondary  interest; 
since  the  value  received  is  so  much  greater  than  the  cost  of 
conducting  the  organization  the  latter  really  becomes  of  little 
consequence.  A  secretary  or  a  treasurer,  especially  when  the 
offices  are  held  by  one  man,  should  not  have  to  spend  his 
time  in  raising  money.  If  he  is  hampered  by  a  lack  of  funds, 
or  if  he  has  to  spend  a  portion  of  his  time  in  endeavoring 
to  get  money,  he  cannot  then  do  the  constructive  work 
necessary. 

The  budget  is  the  chart  by  which  an  association  lays  its 
course,  and  in  addition  a  sufficient  amount  should  be  set 
aside  each  year  as  a  surplus.  In  an  emergency  this  money 
is  available,  and  it  is  always  desirable  that  an  association 
should  have  a  sufficient  reserve  fund  in  the  bank  or  out  on 
investment.  The  same  rules  apply  to  an  association  as  to 
an  individual ;  the  man  or  the  association  that  has  a  little 


66  TRADE   ASSOCIATIONS 

money  laid  by  can  always  feel  easier  than  the  one  that  is 
living  up  to  the  full  extent  of  annual  income. 

Extra  expenses  which  are  not  covered  in  the  budget  can 
be  raised,  of  course,  by  special  assessments  after  being  ap- 
proved by  the  executive  or  finance  committee;  and  if  the 
treasurer  has  occasion  to  pay  out  any  large  sum  of  money 
which  is  not  covered  in  the  budget  but  which  can  be  taken 
from  reserve  funds,  he  should  always  procure  the  approval 
of  the  committee  having  such  matters  in  charge.  This  is  not 
only  desirable  from  a  business  standpoint,  but  also  protects 
the  treasurer  from  making  any  payments  for  which  he  might 
personally  be  criticized. 

A  Sample  Budget 

A  budget  for  an  association  may  be  made  up  as  follows: 

Last  Year's 

Special  Expenses  Budget 

Travel    $  1,000.00 

Telephone  and  Telegraph...  500.00 

Legal    5,000.00 

Postage   750.00 

Stenographic  Reports 500.00 

Secretary    10,000.00 

Office  Force 4,500.00 

Printing  and  Stationery....  1,200.00 

Miscellaneous    150.00 


Last  Year's 

Budget  for 

Expenses 

the  New  Year 

$  1,079.50 

$  1,100.00 

417.00 

500.00 

5,000.00 

5,000.00 

720.00 

750.00 

425.00 

500.00 

10,000.00 

10,000.00 

4,797-25 

5,000.00 

1,601.12 

1,600.00 

74.20 

150.00 

Total  Special $23,600.00       $24,114.07       $24,600.00 


General  Expenses 

Rent   $1,000.00  $1,000.00  $1,000.00 

Office    Supplies 100.00                89.00  100.00 

Dues  and  Subscriptions 150.00              140.00  150.00 

Fixtures    150.00               120.00  150.00 

Miscellaneous    120.00                59- 10  100.00 

Surplus    880.00  900.00 


Total  General $2,400.00         $1,408.10  $2,400.00 


Total  Budget $27,000.00 


ASSOCIATION    ROUTINE 


67 


In  the  budget  here  shown  the  expenses  are  divided  into 
two  groups,  "Special  Expenses"  and  "General  Expenses." 
This  division  is  necessary  only  where  several  associations 
participate  in  the  general  expenses.  When  this  is  the  case  the 
total  general  expenses  for  running  the  office  are  then  divided 
on  a  percentage  basis  among  the  associations  participating. 
This  percentage  is  determined  largely  by  a  joint  meeting  of 
the  budget  committees  of  each  association.  The  special  ex- 
penses of  each  association  are  kept  separate,  however,  because 
those  are  the  expenses  which  have  been  incurred  for  the  work 
of  that  association  alone. 

The  items  in  the  budget  are  self-explanatory.  "Legal" 
refers  generally  to  a  retainer  which  is  paid  a  legal  counsel 
or  adviser.  "Stenographic  Reports"  refers  to  the  cost  of 
transcribing  what  is  said  at  each  meeting.  As  stated,  it  is 
always  desirable  to  set  aside  a  certain  sum  for  "Surplus," 
which  is  held  in  reserve  for  unexpected  expenses. 

If  the  association  has  been  in  operation  for  more  than 
one  year  the  budget  is  divided  into  three  columns.  The  first 
column  shows  the  budget  for  the  previous  year;  the  second 
column,  the  actual  expenses  for  that  year;  and  the  third 
column,  the  proposed  budget  for  the  ensuing  year.  In  figuring 
a  budget  it  is  always  well  to  have  ample  amounts  given  to 
each  item  because  it  is  much  pleasanter  at  the  end  of  the 
year  to  find  that  the  association  has  spent  less,  item  by  item, 
rather  than  more. 

Fines  and  Penalties 

Some  associations  have  a  system  of  fines,  varying  accord- 
ing to  the  offense,  but  the  idea  of  fining  members  is  not  a 
popular  one  nor  conducive  to  enthusiastic  support.  Even  if 
the  member  feels  that  a  fine  is  justified,  he  naturally  somewhat 
resents  it  and  does  not  hold  the  same  cordial  attitude  towards 
the  association  after  its  infliction  as  he  did  before. 


68  TRADE   ASSOCIATIONS 

Suspensions  are  practiced  by  a  great  many  associations 
if  a  member  does  not  live  up  to  the  requirements  of  member- 
ship, or  if  his  actions  in  any  way  reflect  upon  the  members. 
This  acts  as  a  corrective.  If  the  offense  is  of  a  sufficiently 
grave  and  lasting  nature  the  member  can  be  expelled.  No 
member,  however,  should  ever  be  fined,  suspended,  or  ex- 
pelled until  the  case  has  been  investigated  by  an  impartial 
committee  and  the  member  has  had  full  and  ample  opportunity 
to  state  his  side  of  the  question.  Members  who  are  suspended, 
or  even  expelled,  may  be  reinstated  upon  written  application 
and  guaranty  of  proper  conduct  and  of  proper  appreciation 
'of  the  standards  of  the  association. 

The  earlier  forms  of  trade  associations  had  a  very  elaborate 
system  of  fines  and  penalties.  It  was  chiefly  in  the  pool  that 
the  practice  of  requiring  bonds  from  members  was  first  ob- 
served. Under  this  system  should  any  member  violate  the 
agreement  to  which  he  was  bound,  his  bond  would  be  forfeited 
as  a  punishment  to  himself  and  as  a  compensation  to  the 
injured  members.  This  pernicious  practice  has  met  its  own 
end  since,  like  price-fixing,  it  interfered  with  individual 
liberty,  created  bad  feeling,  and  was  fundamentally  wrong. 

Association  Officers 

The  officers  of  an  association  should  consist  of  a  president, 
one  or  more  vice-presidents,  a  secretary,  and  a  treasurer;  but 
the  offices  of  secretary  and  treasurer  may  be  filled  by  one 
person.  The  officers  should  be  elected  at  the  annual  meeting, 
after  the  report  of  the  nominating  committee,  and  they 
generally  hold  office  for  one  year  only. 

Sometimes  the  members  elect  merely  an  executive  com- 
mittee; and  then  this  committee  elects  the  officers,  excepting 
the  secretary,  from  among  its  own  members.  But  as  members 
quite  often  like  to  elect  their  own  officers  and  as  there  is 
seldom  any  competition,  that  having  been  previously  settled 


ASSOCIATION    ROUTINE  69 

by  the  nominating  committee,  the  names  of  the  proposed 
officers  are  usually  submitted  at  the  annual  meeting  and  they 
are  elected  at  the  same  time  as  the  executive  committee.  They 
are  nearly  always  active  ex  officio  members  of  this  com- 
mittee. 

A  system  followed  by  some  associations  is  to  have  an 
executive  committee  of  say  nine  members :  three  serving  three 
years;  three,  two  years;  and  three,  one  year.  This  method 
requires  that  three  new  members  shall  be  elected  annually  for 
three  years  and  always  keeps  on  the  committee  some  who 
have  had  experience.  When  a  member's  time  expires,  he 
should  not  be  elected  to  succeed  himself  but  someone  else 
should  be  given  a  chance  to  serve. 

In  most  associations  the  custom  is  that  a  president  shall, 
at  the  most,  hold  office  for  only  two  terms,  of  a  year  each; 
and  if  there  is  such  a  custom  it  should  be  followed  as  far 
as  possible,  because  then  the  association  can  never  be  accused 
of  being  run  by  one  man  or  group  of  men. 

The  secretary,  or  secretary-treasurer,  if  he  has  served 
well,  is  generally  re-elected  at  each  annual  meeting. 

Duties  of  Officers 

The  president  presides  at  all  meetings,  has  charge  generally 
of  appointing  committees,  and  decides  what  the  policy  of 
the  association  shall  be,  often  under  the  advice  of  the  executive 
committee  or  board  of  directors.  Presidents  are  seldom 
compensated  for  their  work.  Their  traveling  expenses  some- 
times are  paid.  If  the  association  possesses  a  live,  capable 
secretary,  the  presidency  should  not  be  a  particular  hardship 
for  any  man  to  assume. 

The  duty  of  a  vice-president  is  to  preside  at  a  meeting 
in  the  absence  of  the  president.  A  vice-president  frequently 
serves  as  chairman  of  some  important  committee. 

The  duties  of  a  secretary  are  given  in  Chapter  XV. 


70  TRADE   ASSOCIATIONS 

The  treasurer  should  always  be  under  bond,  the  premium 
on  the  bond  being  paid  by  the  association;  and  the  treasurer 
may  perhaps  be  required  to  give  additional  sureties.  The 
bond  at  all  times  should  be  in  the  custody  of  the  presi- 
dent. 

The  books  and  accounts  of  the  treasurer  should  be  audited 
every  year  by  a  disinterested  accountant  selected  by  the  presi- 
dent or  by  the  executive  committee ;  and  the  accountant  should 
not  be  associated  in  any  way  with  the  industry.  This  makes 
for  an  impartial  report  and  convinces  any  "doubting  Thomas" 
that  the  financial  records  are  in  an  absolutely  satisfactory 
condition. 

Committees 

To  supplement  the  work  of  the  officers,  the  usual  standing 
committees  are  appointed  or  elected,  the  chief  one  of  which 
is  the  executive  committee.  This  committee  attends  to  the 
routine  matters  that  concern  the  operation  of  the  organization. 

In  addition  to  the  regular  standing  committees  provision 
is  made  for  special  committees,  such  as  those  on  trade  rela- 
tions, freight  organization,  grievance,  press,  classification  of 
membership,  committees  for  various  service  bureaus,  etc.,  all 
of  which  supervise  the  technical  functions  of  an  association 
or  attend  to  purely  trade  matters. 

In  appointing  committees  the  president  should  always  be 
careful  to  rotate  their  membership  so  that,  if  possible,  all 
classes  or  groups  are  represented.  If  an  association  is  a 
national  body  the  members  of  the  committee  should  be  selected 
geographically,  in  order  that  every  geographical  division  of 
the  association  may  be  represented.  There  is  danger  of  unin- 
tentionally allowing  a  small  group  of  men  who  do  good  com- 
mittee work  to  serve  on  all  committees  and  practically  run  the 
association.  This  creates  a  "ring."  Some  members,  though 
they  may  not  openly  object,  yet  may  feel  that  since  they  are  not 


ASSOCIATION    ROUTINE  7^ 

allowed  to  take  part  in  the  activities  of  the  association  they 
have  no  particular  reason  for  membership. 

When  a  man  begins  to  lose  interest  in  an  association  he 
should  be  placed  upon  one  of  its  most  important  committees. 
And  if  he  raises  some  particular  objection  to  some  condition 
which  may  exist,  and  a  committee  is  appointed  to  investigate 
and  correct  that  condition,  he  should  most  certainly  be  on  the 
committee,  perhaps  as  chairman. 

One  of  the  best  ways  to  make  a  member  enthusiastic  is 
to  make  him  work,  and  one  of  the  best  ways  to  cure  a  critic 
or  objector  is  to  put  him  on  a  committee  to  correct  the  very 
thing  he  is  criticizing  or  to  which  he  objects. 

Publicity  and  Freedom  of  Trade 

The  by-laws  of  every  association  should  state  that  no 
member  of  the  association  will  enter  into  any  agreement 
whatsoever  which  will  restrain  trade,  limit  production  or 
competition,  regulate  prices,  distribute  business,  or  do  anything 
else  which  is  contrary  to  law. 

And  the  association  should  also  make  it  clear  that  its 
files  and  the  correspondence  and  its  meetings  are  open  to  the 
inspection  of  any  public  official  who,  in  the  performance  of 
his  duties,  is  legally  authorized  to  investigate  the  workings 
of  the  association.  The  association  should  have  nothing  which 
it  should  hesitate  to  disclose  to  the  proper  authorities.  Of 
course,  for  obvious  reasons,  full  publicity  as  to  the  activities 
of  the  association  cannot  be  given  to  the  public,  as  the  records 
are  of  private  business ;  but  there  should  be  nothing  in  private 
business  which  is  at  all  irregular  and  therefore  the  association 
should  at  no  time  claim  to  be  a  secret  body. 

These  stipulations  as  to  publicity  and  freedom  of  trade 
should  be  set  forth  explicitly  in  the  by-laws  as  fundamentally 
the  practice  of  the  members  of  the  association.  They  are  in 
a  way  a  declaration  of  principle  and  procedure. 


72  TRADE    ASSOCIATIONS 

By-Laws 

The  following  are  specimen  by-laws  of  trade  associations 
which  provide  for  the  purposes  already  set  forth  in  this 
chapter: 

Article  I — Name 

Section  i.    The  name  of  this  Association  shall  be 

Association. 

Article  II — Purpose 

Section  i.  The  purpose  of  this  Association  shall  be  to 
encourage  social  relations  among  its  members  and  to  discuss 

any  matters  of  mutual  interest  to  the    (name  of 

trade). 

Article  III — Membership 

Section  i.  Every  individual,  co-partnership,  or  corpora- 
tion actually  engaged  in  the  manufacture  of (name 

of  commodity)  within  the  common  application  of  the  term 
in  the  United  States  shall  be  entitled  to  membership  in  this 
Association. 

Section  2.  Any  such  individual,  co-partnership,  or  cor- 
poration may  become  a  member  of  this  Association  upon 
formal  application  for  membership  therein,  made  in  w^riting 
to  the  secretary,  upon  due  election  as  such  at  any  regular 
meeting  of  the  Association  by  a  majority  vote  of  members, 
and  upon  payment  of  dues  for  the  current  year. 

Section  3.    An  applicant  for  membership  in  the 

Association  must  establish  the  following  qualifications: 

(a)  That    applicant    is    a     regular    manufacturer    of 

,  of  a  grade  no  less  than   

(b)  That  applicant  shall  show  that  he  has  manufactured 

the  above  grade  or  better  at  an  average  production 

of   tons  per  week  for  a  consecutive 

period    of    one    year    previous    to    the    date    of 
application. 

(c)  That    applicant's    mill    is    equipped    with    

machinery  to  warrant  making 


ASSOCIATION    ROUTINE  73 

(d)  That  the  applicant  agrees  to  pay  all  dues  and  assess- 

ments promptly,  to  make  all  regular  reports  and 
all  other  required  reports,  to  be  represented  when 
possible  at  all  meetings,  and  to  co-operate  with 
the  Association  in  all  matters  of  general  interest 
to  the  industry. 

(e)  That  applicant's  business  shall  have  been  established 

for  at  least  one  year  and  such  additional  time 
as  the  Executive  Committee  may  deem  desirable. 

Article  IV — Dues  and  Assessments 

Section  i.  Membership  dues  shall  consist  of  $ioo  flat  per 
year  for  each  member,  plus  such  assessment  or  assessments 
as  may  be  necessary  to  met  the  annual  expenses  of  the 
Association.  Such  assessment  shall  be  made  pro  rata  upon 
the  gross  sales  of  members  for  the  previous  year. 

Article  V — Meetings 

Section  i.  The  President  shall  call  all  meetings  of  the 
Association.  In  his  inability  the  Vice-President  shall  have 
power  to  do  so,  or  meetings  shall  be  called  at  the  written 
request  of  any  seven  members  of  the  Association. 

Section  2.  At  any  business  meeting  of  the  Association 
members  may  be  represented  and  vote  as  follows :  if  an 
individual  member — by  the  individual ;  if  a  co-partnership — 
by  any  partner ;  if  a  corporation — by  any  officer  of  such 
corporation ;  and  in  no  case  shall  any  individual,  co-partner- 
ship, or  corporation  be  entitled  to  more  than  one  vote. 

Section  j.  Unless  otherwise  determined  by  a  two-thirds 
vote  of  the  members  present  representation  in  the  meetings 
of  the  Association,  except  as  provided  by  Article  VIII,  shall 
be  only  by  individual  members  or  partners  of  members,  or  by 
an  executive  officer  of  the  company  member,  or  by  a  repre- 
sentative of  a  company  member  with  written  authority  of 
power  to  act  and  whose  actions  shall  be  binding  upon  his 
company;  and  so  far  as  practical  by  the  same  representative 
at  each  meeting. 

Section  4.  At  any  meeting  of  this  Association  repre- 
sentation  of  one-third  of  the  members  shall  be  a  quorum 


74  TRADE   ASSOCIATIONS 

for  the  transaction  of  all  business,  except  on  the  question 
of  membership,  when  a  majority  is  necessary. 

Section  5.  There  shall  be  an  annual  meeting  held  in 
April  of  each  year. 

Article  VI — Officers  and  Duties 

Section  i.  All  officers  of  the  Association  shall  be  either 
individual  members,  partners  of  a  co-partnership  member 
thereof,  or  officers  of  a  corporation  member  thereof,  except- 
ing the  Secretary  and  Treasurer.  There  shall  be  a  President, 
two  Vice-Presidents,  a  Secretary,  and  Treasurer,  but  the 
Secretary  and  Treasurer  may  be  one  person. 

Section  2.  The  officers  of  the  Association  shall  be  elected 
at  the  regular  annual  meeting  of  the  Association  and  shall 
hold  office  for  one  year,  or  until  their  successors  are  chosen 
and  qualified. 

Section  3.  There  shall  be  an  Executive  Committee  of 
not  less  than  five  (5)  and  not  more  than  seven  (7)  members, 
which  shall  consist  of  the  President  and  two  (2)  Vice- 
Presidents  ex  officio,  and  four  (4)  members  to  be  chosen 
at  large. 

Section  4.  The  President  shall  preside  at  all  meetings 
of  the  Association.  In  his  absence  a  Vice-President  shall 
preside.  In  the  absence  of  both  President  and  Vice-Presi- 
dents the  members  present  at  any  meeting  may  by  a  majority 
vote  elect  a  chairman  pro  tem  to  preside  over  such  a 
meeting. 

Section  5.  The  Secretary  shall  keep  proper  records  of 
the  meetings  and  all  formal  actions  of  the  Association  and 
its  committees.  He  shall  have  the  custody  of  all  its  records 
and  papers  in  general.  Statistics  and  other  confidential 
information  received  from  members  shall  not  be  com- 
municated to  other  members  without  specific  permission  of 
the  member  giving  same,  but  nothing  in  this  section  shall 
be  construed  to  prohibit  the  compiling  of  records  and  sta- 
tistics en  bloc  or  in  totals  and  the  furnishing  of  such  com- 
pilations to  all  the  members.  He  may  give  to  the  president 
the  names  of  members  reporting  and  not  reporting.  He 
shall  on  order  of  the  president  issue  written  notices  of  all 
meetings  of  the  Association  to  members. 


ASSOCIATION   ROUTINE  75 

The  Secretary-Treasurer  shall  be  directly  responsible  to 
the  Executive  Committee,  who  shall  have  general  supervision 
over  the  affairs  of  the  Association. 

Section  6.  The  Treasurer  shall  have  the  custody  of  and 
receive  and  disburse  all  funds  of  the  Association. 

The  Treasurer  shall  give  bond  in  such  sum  and  with 
such  sureties  as  the  Executive  Committee  shall  determine, 
and  such  bond  shall  be  held  in  the  custody  of  the  President. 

The  books  and  accounts  of  the  Treasurer  shall  be  properly 
audited  at  least  once  in  each  year  by  a  suitable  disinterested 
accountant  to  be  selected  by  the  Executive  Committee,  such 
accountant  not  to  be  connected  with  the   industry. 

Section  7.  In  case  of  death,  resignation,  or  other  dis- 
ability of  any  ofificer,  his  successor  may  be  chosen  for  the 
balance  of  the  current  year  by  a  majority  of  the  Executive 
Committee. 

Article  VII — Freedom   of  Trade 

Section  i.  No  member  of  the  Association  shall  enter 
into  any  agreement  of  any  nature  whatsoever  the  object 
of  which  is  to  restrain  trade,  limit  production  or  competition, 
regulate  prices,  distribute  business,  or  do  any  other  act 
which  is  contrary  to  law. 

Article  VIII — Publicity 

Section  i.  The  records  of  the  Association,  its  files  and 
its  correspondence  and  its  meetings  shall  be  open  at  all  times 
to  any  public  official  who,  in  the  performance  of  his  duties, 
is  legally  authorized  to  investigate  the  workings  of  the 
Association,  the  fundamental  object  of  the  Association  being 
perfect  frankness  and  openness  in  all  dealings  among  mem- 
bers and  in  all  dealings  with  customers  and  the  public. 

Article  IX — Amendments 

Section  i.  These  articles  may  be  repealed,  amended,  or 
suspended  by  a  majority  vote  of  the  members  present  at 
any  meeting  of  the  Association  duly  called  and  regularly 
held,  seven  days'  notice  of  such  change  having  been  sent 
in  writing  to  the  members. 


CHAPTER  VII 

MEETINGS 

Frequency  of  Meetings 

Meetings  of  an  association  are  a  necessary  part  of  its 
activities,  but  are  subject  to  regulation.  Some  associations 
hold  meetings  too  often  and  others  too  infrequently.  In  the 
beginning,  while  the  members  are  getting  acquainted  and  gain- 
ing confidence,  it  is  desirable  that  they  should  often  gather 
together;  but  after  an  association  has  been  in  existence  for 
some  time  it  is  better  to  hold  regular  meetings  at  fixed  periods. 

The  reason  for  holding  regular  meetings  is  that  the  asso- 
ciation then  follows  a  definite  program,  the  members  know- 
when  a  meeting  is  to  occur  and  can  plan  for  it  several  weeks 
ahead,  and  the  association  does  not  then  lay  itself  open  to 
the  unjust  criticism  of  meeting  only  when  difficulties  arise  and 
there  is  something  to  be  "put  over."  Some  associations  meet 
every  month,  but  a  majority  hold  quarterly  meetings. 

Preliminaries  to  Holding  a  Meeting 

Each  member  should  be  notified,  well  in  advance,  of  the 
date,  exact  time,  and  place  of  the  meeting,  and  if  possible 
of  the  subjects  which  are  to  be  discussed.  In  this  way  he 
can  inform  himself  before  attending  the  meeting  and  be  in 
possession  of  certain  facts  which  may  be  called  for.  A  paper 
or  card  of  definite  questions  which  he  will  be  expected  to 
answer  on  behalf  of  his  company  in  the  meeting  is  often 
sent  him  also. 

If  the  meeting  is  to  be  held  at  an  important  center  the 
members  should  be  urged  to  write  well  ahead  of  time  for 
their  hotel  reservations,  as  they  can  then  get  the  right  kind 

76 


MEETINGS  T7 

of  accommodations  and  do  not  enter  the  meeting  in  a  dis- 
gruntled frame  of  mind. 

Where  to  Hold  Meetings 

The  place  of  a  meeting  should  be  carefully  selected.  In 
the  beginning  it  is  desirable  always  to  hold  a  meeting  away 
from  trade  centers  because  the  members  then  have  nothing 
else  to  do  but  to  give  their  undivided  attention  to  the  work 
of  the  assembled  association.  Often,  if  the  meeting  is  held 
in  a  city  where  the  members  have  customers,  the  members 
will  spend  most  of  their  time  sitting  on  the  edge  of  their 
chairs  and  looking  at  their  watches  in  order  not  to  miss  an 
appointment  made  with  a  customer.  Thus  their  interest  and 
attention  are  lost  and  the  meeting  of  the  association  suffers. 

If  an  association  has  members  in  both  East  and  West 
the  meetings  should  alternate  for  instance  between  New  York 
City  and  Chicago  or  be  held  at  a  convenient  central  point. 
This  equalizes  traveling  expenses  and  time.  As  the  meetings 
come  to  be  regarded  by  the  members  as  important  events  the 
place  of  meeting  will  cease  to  matter  provided  that  it  is  rea- 
sonably convenient,  as  the  members  will  not  only  attend  but 
will  stay  until  adjournment. 

When  to  Call  Meetings 

The  question  often  arises  as  to  whether  a  meeting  should 
be  called  at  all  unless  there  is  some  important  business  to 
transact.  As  a  general  rule  there  should  be  important  matters 
to  consider,  but  even  when  there  does  not  appear  to  be  any- 
thing in  particular  to  discuss  the  meeting  will  be  very  likely 
to  develop  of  itself  into  one  of  the  best  ever  held.  This 
has  proved  true  in  so  many  instances  that  one  cannot  say 
definitely  that  a  meeting  never  should  be  held  unless  there 
are  specific  matters  to  discuss. 

The  discretion  as  to  calling  a  meeting  and  defining  its 


78  TRADE   ASSOCIATIONS 

purpose  lies  largely  with  the  executive  committee,  or  the 
president  and  secretary.  They  know  the  association  best  and 
should  always  be  sure,  if  they  have  not  something  definite 
to  discuss,  that  the  members  at  least  are  in  such  a  frame  of 
mind  that  they  will  make  the  meeting  itself  a  success.  There 
is  nothing  more  disastrous  to  the  welfare  of  future  meetings 
than  to  call  a  meeting  and  have  it  a  partial  failure,  because 
the  next  time  that  a  meeting  is  called,  when  perhaps  some- 
thing really  important  is  to  be  considered,  a  member  will 
often  say  to  himself,  "Well,  I  went  to  the  last  meeting  and 
it  didn't  amount  to  anything  and  so  I  guess  I'll  not  waste 
my  time  by  going  to  this  one." 

Among  large  national  associations,  how^ever,  only  one 
meeting  a  year  is  held,  which  is  generally  not  only  a  business 
but  a  social  affair.  The  business  session  is  always  accom- 
panied by  meetings  of  various  groups  or  committees  and  is 
apt  to  be  more  or  less  formal  in  itself. 

How  to  Call  Meetings 

After  the  date  of  a  meeting  has  been  fixed,  either  by  vote 
at  a  former  meeting  or  by  the  executive  committee  or  the 
president,  a  notice  containing  the  following  information 
should  be  sent  to  all  the  members: 

Member Association  Subject:   Next  Meeting 

Dear  Sir: 

A  meeting  of  the   (name  of  association)    will  be  held 

on (day  and  date)  at (time)  in (room) 

of  the  (hotel,  city,  and  state). 

We  trust  that  you  surely  will  be  represented  and  will  advise 
us  in  this  regard.  y^^^  sincerely  yours, 

(Name  of  Association) 

Secretary 

By  order  of  the  President  (or  Chair- 
man  or   Executive   Committee). 


MEETINGS  79 

Be  sure  that  it  is  stated,  under  the  secretary's  name, 
who  authorized  the  caUing  of  the  meeting;  then  there  can 
be  no  question  about  it. 

This  notice  ought  to  reach  every  member  at  least  a  fort- 
night before  the  date  set  for  the  meeting.  If  the  meeting  is 
to  be  held  in  a  city  temporarily  crowded  the  notice  should 
be  sent  still  earlier  in  order  that  the  members  may  have  ample 
time  for  making  hotel  reservations.  Just  at  this  point  it 
might  be  added  that  the  secretary  is  wise  if  he  always  lets 
the  members  make  their  own  reservations  direct  with  the 
hotel. 

About  a  week  before  the  meeting  a  reminder  should  be 
sent  to  all  the  members  as  follows: 

Member Association 

Subject:  Reminder 

Dear  Sir: 

This  will  remind  you  of  the  next  meeting  of  the (name 

of  association),  which  is  to  be  held  on    (day  and  date) 

at (time)  in (room)  of  the (hotel,  city, 

and  state). 

We  trust  that  you  surely  will  be  represented. 

Very  sincerely  yours, 

(Name  OF  Association) 

Secretary 

No  authority  has  to  be  given  here  as  this  is  just  a  reminder 
of  the  official  notice. 

If  the  meeting  is  to  be  held  in  a  city  where  members 
happen  to  reside,  they  should  all  be  telephoned  the  morning 
of  the  meeting  and  reminded  of  the  time  and  place.  If  the 
above  outlined  system  is  followed  out  the  members  can  never 
offer  as  an  excuse  that  they  did  not  receive  due  and  sufficient 
notice.  Telegraphic  notices,  of  course,  have  to  follow  a  dif- 
ferent form,  but  all  facts  should  be  given. 


8o  TRADE   ASSOCIATIONS 

How  to  Conduct  a  Meeting 

Both  the  president  and  the  secretary  should  be  in  pos- 
session of  a  regular  program  for  the  conduct  of  each  meeting. 
This  program  is  made  out  with  a  time  schedule  so  that  the 
president  may  know  about  how  long  discussions  should  last, 
and  thus  not  have  the  meeting  unduly  prolonged. 

The  time  indicated  in  the  schedule  here  given  is  the  time 
of  completion  of  each  part  of  the  program. 

io:oo  A.M. — Call  of  the  Meeting 

io:io  A.M. — Roll-Call 

10:20  A.M. — Reading  Minutes  of  the  Previous  Meeting 

10:30  A.M. — Market  Report  by  Secretary 

11:30  A.M. — Market  Conditions  by  Roll-Call 

11:45  ^•^- — Unfinished  Business 

(a)  Report   of   Tariff   Committee,   by   Mr.   J.   L. 

Jones,  Chairman 

(b)  Report  of  Freight  Committee,  by  Mr.  F.  R. 

Smith,  Chairman 
12:00      M. — New  Business 

(a)  Investigation  of  Foreign  Exchange,  by  Mr. 

A.  N.  Black 

(b)  Standardization    of   Weights,   by   Mr.   R.    C. 

White 
12:45  P-'^- — Summary  by  the  President 
I  :oo  P.M. — Adjournment 

Sometimes  the  members  are  furnished  with  copies  of  the 
program  in  order  that  they  too  may  see  what  is  to  be  con- 
sidered and  how  fast  the  meeting  is  progressing.  In  this  way 
they  can  help  in  speeding  up  the  meeting  and  eliminating 
unnecessary  discussion. 

Call  of  the  Meeting 

The  secretary  should  always  have  with  him  the  call  of  the 
meeting  with  its  authorization  in  order  that  there  may  be  no 
question  about  the  meeting  being  legally  convened. 


MEETINGS  8^ 

Roll- Call 

The  names  of  all  the  members  of  the  association  should 
be  listed  on  a  sheet  of  paper,  with  the  name  of  the  usual 
representative  of  each  company  opposite  the  company's 
name.  If  a  company  has  more  than  one  representative  their 
names  should  be  entered  for  the  company  which  they  represent. 
The  secretary  then  can  read  the  list  and  check  those  present. 

Reading  Minutes  of  the  Previous  Meeting 

The  minutes  of  the  previous  meeting  should  always  be 
read.  There  is  a  tendency  to  omit  the  reading  of  these 
minutes  in  order  to  save  time,  but  the  omission  is  unwise; 
the  members  ought  to  be  willing  to  give  a  minute  or  two  to 
refresh  their  memory  as  to  what  took  place  at  the  last  meeting 
and  to  make  necessary  corrections. 

Report  of  Market  Conditions 

In  Chapters  XIV  and  XV  it  is  shown  that  the  secretary 
should  be  given  at  least  a  half -hour  for  a  clear  and  careful 
exposition  of  market  conditions,  to  be  illustrated  by  charts 
or  any  other  means  by  which  he  can  visualize  to  the  members 
the  facts  which  he  wishes  to  bring  out.  This  report  requires 
careful  preparation  on  the  part  of  a  secretary,  and  when  it 
is  delivered  the  secretary  should  be  so  familiar  with  his  mate- 
rial as  to  be  able  to  speak  without  notes. 

Opinions  of  Members 

The  way  in  which  members  are  called  on  for  their  brief 
individual  reports  determines  the  success  or  failure  of  the 
meeting.  Of  course,  in  an  annual  meeting  of  a  large  asso- 
ciation not  everyone  can  speak,  but  in  a  smaller  association, 
where  there  are  only  50  or  60  companies  represented,  state- 
ments by  each  representative  present  will  bring  forth  inter- 
esting discussion  and  valuable  information. 


82  TRADE   ASSOCIATIONS 

In  former  days  it  was  said  that  such  a  round  robin  of 
experience  and  statement  was  simply  an  encouragement  to 
the  Ananias  Club,  but  after  members  have  become  accustomed 
to  making  reports  and  are  well  acquainted  they  will  hesitate 
about  getting  up  and  making  any  statements  that  can  be 
questioned.  By  having  definite  answers  to  give  to  the  ques- 
tions on  the  papers  or  cards  mailed  to  the  members  with  the 
call  of  the  meeting,  a  clear-cut  conception  of  the  market  can 
be  gathered  and  a  member  does  not  have  to  flounder  around 
trying  to  say  something. 

If  the  card  system  of  answers  is  not  feasible  another  good 
device  is  to  have  at  the  end  of  the  room  a  chart  or  a  black- 
board on  which  are  written  six  or  seven  subjects  on  which 
the  member  is  to  report.  This,  like  the  cards,  crystallizes 
and  confines  the  roll-call  for  discussion  to  definite  limits  and 
gives  the  members  some  positive  information  about  certain 
facts  which  they  all  desire.  In  responding,  members 
should  be  careful  to  give  definite  facts  and  not  mere  gen- 
eralizations. 

The  following  card  (Form  i)  suggests  a  form  which  may 
be  used  in  procuring  definite  reports  of  members  at  a  meet- 
ing. 

The  upper  part  of  the  card,  down  to  No.  i,  is  filled  out 
at  the  association  office  and  mailed  to  the  member  with  the 
initial  call  of  the  meeting.  The  two  columns  on  the  card 
are  for  the  member  to  fill  in  his  report  of  business  for  a 
period ;  the  first  column  for  the  business  of  one  month,  and 
the  second  column  for  that  of  the  last  week,  the  dates  appear- 
ing after  "from"  and  "to."  The  date  appearing  after  "to" 
is  the  nearest  possible  date  to  the  meeting  itself.  This  enables 
the  member  to  give  a  definite  report  of  his  business  for  the 
four  weeks  just  preceding  the  date  of  the  meeting  and  also 
a  report  for  the  last  week  before  the  meeting.  The  association 
reports,  because  of  the  necessity  of  their  being  compiled  and 


MEETINGS 


83 


PLEA  9£  BRI\G  WITH  YOU.     IF  YOU  CANNOT  BE  REPRESENTED, 

THEN  PLEASE  PILL  OUT  ASD  MAIL  TO  THE  SECRETARY 

AT  TBE  PLACE  OF  MEETING 

Meeting-  Report  Card 

At  the  next  meeting  of  the - 

Manufacturers  Association    to   be  held 

_ ,    192     at m. 


on. 
at- 


will  you  please  be  prepared  to  report  on 
the  following: 


FROM 


1  Orders    Received 

2  Orders  Unmade- 

3  Production 

4  Shipments  

5  Stock  of  Finished 

Product  on    hand 

6  Stock  of  Raw 

Materials  on  hand 
a.  Steel 

h.  Cement . 
c.  Coal" 


% 

weeks 

..- % 

% 


weeks 

weeks 
weeks 
weeks 


...  % 
/eeks 

% 

....  % 


weeks 

weeks 
weeks 
weeks 


7  Labor  Situation  in  your  locality 

8  Freight  Situation  in  your  locality 

9  Any  other  facts  you  think  of  interest 


Name. 


Form  I .     Report  of  Members  at  Meeting.     (Size  4x7.) 


84  TRADE    ASSOCIATIONS 

mailed  to  the  members  by  the  association  always  cover  a 
period  up  to  about  a  fortnight  before  the  meeting,  so  that 
these  individual  meeting  report  cards  help  to  bring  the  report 
of  the  business  up  to  date. 

Limiting  the  Time  of  Speeches 

There  was  once  a  somewhat  loquacious  man  who  upon 
returning  home  from  a  town  meeting  was  asked  by  his  wife 
if  it  had  been  a  pleasant  and  successful  affair.  "Why,  yes," 
he  said,  "I  did  most  of  the  talking." 

It  is  a  peculiarly  human  thing  that  when  a  member  leaves 
a  meeting  he  always  feels  better  if  he  has  had  a  chance  to 
say  something.  Some  members  may  wish  to  enlarge  this 
chance  a  little  too  much ;  but  for  the  general  good  it  is  always 
well,  if  the  size  of  the  meeting  will  permit,  to  give  each 
member  a  chance  to  be  called  upon. 

In  order  that  no  member  may  monopolize  all  the  time 
given  to  discussion  from  the  floor  the  presiding  officer  often 
reads  and  has  adopted  by  those  present  simple  rules  or  agree- 
ments for  the  meeting.  These  rules  should  make  it  clear  that 
all  discussion  must  be  pertinent  to  the  subject  or  motion 
under  consideration  and  that  no  member  can  talk  for  more 
than,  say,  five  minutes  on  any  one  subject  except  by  permis- 
sion through  acclamation  of  the  meeting.  Sometimes  a  meet- 
ing will  adopt  rules  allowing  no  one  to  speak  more  than 
once  during  the  entire  discussion  of  a  subject,  but  this  is 
generally  too  severe.  A  time  limit  is  a  good  thing  to  make 
a  man  speak  clearly  and  briefly.  The  presiding  officer  raps 
when  only  one  minute  of  the  speaker's  time  is  left  thus  allow- 
ing him  to  close  what  he  is  saying.  At  the  end  of  a  speaker's 
time  the  presiding  officer  arises  or  raps.  A  sense  of  good- 
natured  humor  must  pervade  all  a  presiding  officer  does, 
especially  in  calling  time,  but  a  member  very  seldom  takes 
offense  when  time  is  called  upon  him. 


MEETINGS  85 

The  Desirability  of  a  Stenographic  Record 

It  is  because  of  the  possible  misinterpretation  of  general 
discussion  that  it  is  necessary  and  desirable  to  have  a 
stenographer  present  at  every  meeting  to  take  down  every- 
thing that  is  said.  At  first  the  members  may  feel  that  this 
will  hamper  the  freedom  of  the  discussion,  but  after  a  while 
they  will  not  be  troubled  in  the  least  on  this  score.  The 
advantage  of  the  practice  is  that  if  anyone  who  investigates 
the  association  ever  questions  what  was  said  at  a  meeting, 
or  if  any  member  who  does  not  recall  quite  clearly  the  maker 
of  a  certain  statement  wishes  verification,  the  written  records 
are  there  to  be  consulted.  A  written  record  of  everything 
said  at  a  meeting  is  also  necessary  for  legal  reasons,  as  will 
be  indicated  in  a  subsequent  chapter. 

Unfinished  Business 

Unfinished  business  should  always  be  brought  before  the 
association  and  if  possible  passed  upon  and  put  out  of  the 
way.  Under  both  unfinished  business  and  new  business  ob- 
vious motions  that  are  to  be  made  should  be  written  out  and 
given  to  certain  members  who  would  be  likely  to  make  such 
motions.  This  clarifies  motions  and  helps  speed  up  the  meet- 
ings. Of  course,  only  motions  that  have  reference  to  routine 
business  would  be  written  out  beforehand.  Simply  because 
some  motions  are  written  out  is  no  reason  why  one  cannot 
make  a  motion  or  amend  one  as  read  if  he  wants  to,  pro- 
vided his  motion  or  amendment  relates  to  the  subject  under 
discussion. 

Under  unfinished  business  come  the  reports  of  standing 
committees.  The  chairmen  of  these  committees  should  be 
notified  before  the  meeting  that  such  reports  from  their  re- 
spective committees  are  to  be  called  for  so  that  each  chairman 
can  be  prepared  to  give  his  report  without  any  unnecessary 
delay. 


86  TRADE   ASSOCIATIONS 

New  Business 

New  business  may  be  presented  either  by  the  officers  or 
by  some  committee,  or  may  be  brought  up  on  the  floor  by 
members.  New  business  consists  of  subjects  which  have  been 
suggested  to  the  association  for  consideration  or  discussion  at 
the  meeting.  The  specimen  program  indicates  that  Mr.  Black 
has  suggested  an  investigation  of  foreign  exchange  and  so 
he  should,  when  called  upon,  be  ready  to  present  that  subject ; 
Mr.  White  has  suggested  that  weights  should  be  standardized 
and  should  therefore  be  prepared  to  present  his  views. 

Summary  by  the  President 

Often  at  the  annual  meeting  of  a  large  national  association 
the  president  will  read  a  written  report,  which  of  course 
should  come  before  the  report  of  the  secretary;  but  in  smaller 
associations  it  is  quite  desirable  that  either  the  president  or 
secretary,  or  someone  appointed  for  such  a  purpose,  should 
at  the  conclusion  of  the  meeting  summarize  and  crystallize 
in  a  few  words  all  that  has  been  said  at  the  meeting.  This 
gives  the  members  something  definite  to  take  away  with  them 
and  does  not  allow  them  to  leave  the  meeting  with  only  a 
hazy  idea  of  what  has  been  discussed,  or  with  the  notion  that 
nothing  much  was  accomplished. 

Adjournment 

In  adjourning  a  meeting  the  time  and  place  of  the  next 
meeting  should  be  determined,  if  possible;  or  this  matter 
should  be  left,  with  power,  to  the  president  or  executive 
committee. 

Report  of  Meeting 

Some  associations  make  it  a  practice  to  send  all  absentees 
a  copy  of  the  minutes  of  a  meeting.  Others  send  all  members 
a  complete  edited  stenographic  report  of  everything  that  was 


MEETINGS  87 

said  at  a  meeting.  Such  a  procedure  is  entirely  optional,  but 
as  a  general  thing  it  is  not  desirable  because  members  are  not 
always  as  careful  as  they  should  be  with  the  private  records 
of  an  association.  It  is  far  better  for  the  secretary  to  write 
a  letter  to  each  absentee  stating  that  he  is  sorry  the  member 
could  not  be  present  and  giving  the  absentee  a  short  sketch 
of  what  occurred  at  the  meeting. 

Secretary's  Annual  Report 

One  so  often  attends  an  annual  meeting  of  some  associa- 
tion and  listens  to  a  secretary  read  for  half  an  hour  or  more 
a  long-winded,  verbose  report,  that  the  listener  is  inclined 
to  be  disgusted  not  only  with  the  secretary's  judgment  but 
with  the  meeting  itself.  Such  a  lengthy  report  is  better  read 
by  oneself  than  heard,  and  is  still  better  if  not  heard  or  read 
at  all. 

This  does  not  mean  that  the  secretary  should  not  make 
a  report,  but  that  his  report  should  be  in  simple  outline  form 
and  not  over  a  page  or  two  long.  All  that  the  members  want 
to  know  is  exactly  what  has  been  accomplished,  what  work 
is  in  progress,  and  what  work  lies  before  the  association. 
Merely  state  this  in  outline  form  and  let  the  report  go  at 
that.  It  may  not  be  as  complete  as  a  tome,  but  it  at  least 
will  be  heard  or  read  by  the  members  and  will  have  a  stimu- 
lating rather  than  a  soporific  effect  upon  them. 

Reports  in  General 

All  reports  of  committees  or  of  officials  of  an  association 
should  be  made  as  brief  and  direct  as  possible.  The  average 
business  man  has  no  time  or  inclination  in  these  days  of 
many  newspapers  and  periodicals  to  sit  down  and  read 
through  some  weighty,  lengthy  report.  He  will  read  ?nd 
digest  an  outline;  and  then  if  he  is  sufficiently  interested  he 
can  go  back  to  the  original  records.     This  does  not  make  for 


88  TRADE   ASSOCIATIONS 

superficiality,  but  rather  for  conciseness  and  for  getting  re- 
sults. A  report  is  issued  generally  to  get  results,  not  as  a 
literary  exercise.  Results  are  always  more  certain  when  you 
can  get  people  to  listen  to  or  read  a  statement,  no  matter  how 
brief  it  may  be. 

Voting  in  a  Meeting 

A  definite  plan  of  voting  should  be  determined  on  in  order 
that  there  may  be  no  conflict  as  to  whether  or  not  there  was 
a  majority  upon  the  passage  of  any  question.  If  a  firm  is 
an  individual  member,  the  vote  may  be  cast  by  that  individual 
member;  if  it  is  a  copartnership,  by  one  of  the  partners;  if 
a  corporation,  by  any  officer  of  such  corporation;  but  as  a 
general  rule  in  no  case,  no  matter  what  the  importance  of 
a  member  may  be,  ought  he  to  be  entitled  to  more  than  one 
vote.  This  is  a  matter  which  will  have  to  be  adjusted  by 
each  association,  because  sometimes  on  some  questions  the 
larger  companies  feel  that  they  should  be  entitled  to  propor- 
tionately more  votes  than  the  smaller;  and  yet  on  the  other 
hand  if  all  are  entitled  to  only  one  vote,  then  the  small 
member  can  feel  that  he  counts  for  just  as  much  as  the 
large  one. 

How  to  Keep  Minutes 

As  soon  as  possible  after  a  meeting  the  secretary  should 
write  or  dictate  the  minutes  of  the  meeting,  following  the 
form  of  business  procedure  given  previously  in  this  chapter. 

If  he  dictates  the  minutes,  he  ought  to  correct  carefully 
the  stenographer's  draft  and  have  a  final  copy  made  for  his 
minute-book;  for  the  permanent  records  of  the  association 
should  always  be  kept  in  perfect  form.  By  a  simple  system 
of  indexing,  any  vote  on  any  particular  subject  may  be  re- 
corded in  such  a  manner  that  it  can  easily  be  referred  to  if 
desired. 


MEETINGS  89 

The  form  of  the  minutes  should  be  kept  simple.  It  is 
not  necessary  to  state  who  made  and  who  seconded  motions; 
such  details  are  given  in  the  stenographic  report.  The  minutes 
must  be  clear  and  concise.  The  following  outline  shows  all 
that  is  necessary: 

Meeting  of 

The   Manufacturers  Association 

(Place) 

Thursday,  May  19,  1921,  10:30  a.  m. 

A  meeting  of  the   Manufacturers  Association  was  held 

(place)  on  Thursday,  May  19,  1921,  at  10:30  a.m. 
President  John  Smith  presided. 

I  Call  of  the  Meeting 

The  Secretary  read  the  call  of  the  meeting  issued  by  order  of 
the  President  on  April  26  and  the  reminder  issued  on  May  13. 

II  Roll-Call 

There  were  present  representatives  from  the  following  members : 

Richard  Roe  and  Company  John  Doe 

John  Smith  Manufacturing  Company     John  Smith 
Etc. 

The  written  application  for  membership  of  the  Crescent  Manu- 
facturing Company  of  Albany,  New  York,  was  received  and  upon 
recommendation  of  the  Executive  Committee  it  was  moved  and 

Voted:  That  they  be  elected  to  membership. 

The  resignation  of  the  Atlas  Manufacturing  Company  of  Chicago, 
Illinois,  was  received  and  upon  recommendation  of  the  Executive 
Committee  it  was  moved  and 

Voted:  That  the  resignation  be  accepted  with  regret. 

III  Reading  Minutes  of  the  Previous  Meeting 

The  minutes  of  the  previous  meeting  were  read  by  the  Secretary, 
and  it  was  moved  and 

Voted  :  That  the  minutes  stand  approved  as  read. 


90  TRADE   ASSOCIATIONS 

IV  Market  Conditions 

(a)  Market  Report  by  the  Secretary 

The  Secretary  gave  a  verbal  report  of  business  conditions  illus- 
trated by  graphic  charts. 

(b)  Market  Conditions  by  Roll-Call 

General  market  conditions  were  discussed  by  roll-call. 

V  Unfinished  Business 
None. 

VI  New  Business 

(a)  Installation  of  a  Cost  System 

The  question  of  the  installation  of  a  uniform  cost  system  was 
discussed,  and  it  was  moved  and 

Voted:  That  it  be  referred  to  a  committee  of  five  (5)   to  be 
appointed  by  the  President. 

Etc. 

VII  Summary  by  the  President 

The  President  summarized  briefly  the  general  points  which  had 
been  discussed  at  the  meeting. 

VIII  Adjournment 

It  was  moved  and 

Voted:  To  adjourn  subject  to  the  call  of  the  President. 

Adjourned 

Robert  Brown 
Secretary 

Attendance  at  the  Meetings 

If  possible  each  firm  should  always  be  represented  by  the 
same  person.  In  this  way  the  representative  becomes  familiar 
with  the  procedure  and  with  what  has  taken  place  before. 

It  is  quite  desirable  that  the  attendance  at  the  meetings 
should  be  limited.  Unless  limited  the  meetings  soon  become 
large  and  unwieldy,  and  many  may  attend  who  do  not  under- 
stand what  has  been  under  discussion  and  who  later,  by  loose 


MEETINGS  91 

talking,    spread    rumors    and    misinformation,    much    to    the 
disadvantage  of  the  meeting  and  of  the  association. 

Traveling  Expenses 

Some  associations  pay  the  traveling  expenses  of  their 
members  and  also  pay  them  so  much  a  day  for  attending  the 
meetings.  They  claim  that  this  encourages  the  members  w^ho 
are  far  away  to  attend,  since  there  is  not  an  extra  traveling 
expense  burden  placed  upon  them  by  reason  of  being  situated 
at  a  distance.  In  many  associations  such  a  practice  as  this 
is  frowned  upon  as  the  members  feel  that  the  benefits  from 
the  association  are  of  so  much  importance  that  the  matters 
of  time  and  traveling  expense  are  inconsequential. 

The  Annual  Banquet 

The  annual  banquet  is  nearly  always  a  corollary  of  the 
annual  meeting.  There  are  several  reasons  why  it  is,  and 
why  it  should  be.  It  brings  the  members  together  in  an 
unconstrained,  free-and-easy  atmosphere;  it  puts  them  on  an 
equal  footing  as  nothing  else  can  do ;  and  it  cements  their 
unity  by  social  bonds,  supplementing  those  of  self-interest. 

As  everyone  has  attended  the  annual  dinners  of  some 
association  or  club  it  is  not  necessary  to  describe  or  advise 
as  regards  their  procedure,  except  for  this  one  suggestion: 
if  a  dinner  is  held  every  year,  and  if  it  is  attended  by  approxi- 
mately a  thousand  members,  there  will  always  be  some 
members  who  will  want  to  sit  directly  in  front  of  the  speakers' 
table.  The  way  to  meet  this  difficulty  is  to  have  a  fixed  zoning 
system,  that  is,  to  have  the  banquet  hall  divided  into  three 
zones:  number  i  being  in  front  of  the  speakers'  table; 
number  2,  in  the  middle  of  the  hall ;  and  number  3,  in  the 
back  of  the  hall.  The  members  who  at  one  annual  dinner 
sit  in  zone  number  i  sit  the  next  year  in  zone  number  3,  and 
the   following  year   in   zone   number  2 ;   they   then,   another 


92  TRADE   ASSOCIATIONS 

year,  start  the  cycle  again  by  sitting  in  zone  number  i.  This 
seating  arrangement  cannot  give  anyone  reason  to  complain 
because  of  not  being  in  the  front  of  the  hall. 

Of  course  exceptions  have  to  be  made  in  case  a  certain 
member  is  hard  of  hearing  or  for  some  other  good  and 
sufficient  reason  has  to  sit  down  in  front,  but  these  are 
individual  cases;  and  even  with  these  it  should  be  carefully 
provided  that  no  favoritism  shall  be  shown. 

Finally,  always  procure  the  speakers  in  advance.  This 
saves  the  secretary  from  insomnia  and  premature  gray  hair. 

Social  Features 

A  number  of  associations  hold  at  least  one  meeting  a 
year  at  some  place  where  the  members  can  mix  business  and 
pleasure.  Golf  is  the  usual  attraction.  Special  features  such 
as  outdoor  beefsteak  roasts,  automobile  trips,  a  baseball  game 
among  members,  etc.,  all  add  to  the  occasion  and  have  a 
wonderful  effect  in  creating  and  cementing  good  fellowship 
among  the  members — all  of  which  makes  the  association  work 
easier  and  stronger. 

Members'  Wives  at  Association  Meetings 

A  question  is  frequently  asked  whether  or  not  it  is  de- 
sirable to  have  wives  attend  the  meetings  of  an  Association. 
There  is  no  reason  why  any  member  should  bring  his  wife 
to  the  actual  meeting  of  the  association  as  it  is  a  business 
affair  and  there  is  little  or  nothing  in  the  program  that  would 
interest  a  woman.  Furthermore,  there  are  few  women  who 
would  want  to  attend.  Members,  however,  in  attending  a 
meeting  which  is  held  at  some  resort,  frequently  take  their 
wives  with  them  which  quite  often  makes  it  pleasant  for 
everyone  except  the  secretary,  who  generally  has  to  see  that 
some  means  of  entertainment,  such  as  automobile  rides  or 
excursions,  are  provided  for  the  women. 


MEETINGS  93 

It  is  a  good  policy,  nevertheless,  to  urge  the  members  of 
a  trade  association  to  bring  their  wives  with  them  to  at 
least  one  meeting  a  year,  especially  if  that  meeting  is  to  be 
held  at  some  attractive  place  where  the  women  wdll  be  sure 
to  have  a  good  time.  They  do  not,  of  course,  participate  in 
any  of  the  business  sessions  of  the  meeting,  but  in  becoming 
well  acquainted  with  one  another  create  pleasant  friendships 
and  help  their  husbands  to  carry  away  a  more  cordial  feeling 
towards  the  meeting  and  association,  which  no  doubt  in  many 
cases  adds  to  a  member's  enthusiasm  for  the  association. 

"Some  Ways  to  Kill  an  Association" 

A  recent  meeting  of  the  American  Trade  Association  Ex- 
ecutives, the  national  organization  of  association  secretaries, 
was  enlivened  by  the  reading  of  the  following  ironical  hints 
on  "Some  Ways  to  Kill  an  Association." 

1.  Don't  come  to  the  meeting. 

2.  But  if  you  do  come,  come  late. 

3.  If  the  weather  doesn't  suit  you,  don't  think  of  coming. 

4.  If  you  do  attend  a  meeting,  find  fault  with  the  work  of 

the  officers  and  other  members. 

5.  Never  accept  an  office,  as  it  is  easier  to  criticize  than  to 

do  things. 

6.  Nevertheless,  get  sore  if  you  are  not  appointed  on  a  com- 

mittee; but  if  you  are,  do  not  attend  committee  meet- 
ings. 

7.  If  asked  by  the  chairman  to  give  your  opinion  regarding 

some  important  matter,  tell  him  you  have  nothing  to 
say.  After  the  meeting  tell  everyone  how  things 
ought  to  be  done. 

8.  Do  nothing  more  than  is  absolutely  necessary ;  but  when 

other  members  roll  up  their  sleeves  and  willingly,  un- 
selfishly use  their  ability  to  help  matters  along,  howl 
that  the  association  is  run  by  a  clique. 

9.  Hold  back  your  dues  as  long  as  possible  or  don't  pay 

at  all. 


94  TRADE   ASSOCIATIONS 

10.  Don't  bother  about  getting  new  members.    Let  the  secre- 

tary do  it. 

11.  When  a  banquet  is  given,  tell  everybody  money  is  being 

wasted  on  blow-outs  which  make  a  big  noise  and  ac- 
complish nothing. 

12.  When  no  banquets  are  given  say  the  association  is  dead 

and  needs  a  can  tied  to  it. 

13.  Don't  ask  for  a  banquet  ticket  until  all  are  sold. 

14.  Then  swear  you've  been  cheated  out  of  yours. 

15.  If  you  do  get  a  ticket,  don't  pay  for  it. 

16.  If    asked    to    sit   at    the    speaker's    table,    modestly    re- 

fuse. 

17.  If  you  are  not  asked,  resign  from  the  association. 

18.  If  you  don't  receive  a  bill  for  your  dues,  don't  pay. 

19.  If  you  receive  a  bill  after  you've  paid,  resign  from  the 

association. 

20.  Don't  tell  the  association  how  it  can  help  you;  but  if  it 

doesn't  help  you,  resign. 

21.  If  you  receive  service  without  joining,  don't  think   of 

joining. 

22.  If  the  association  doesn't  correct  abuses  in  your  neigh- 

bor's business,  howl  that  nothing  is  done. 

23.  If  it  calls  attention  to  abuses  in  your  own,  resign  from 

the  association. 

24.  Keep  your  eyes  open  for  something  wrong  and  when  you 

find  it,  resign. 

25.  At  every  opportunity  threaten  to  resign   and  then  get 

your  friends  to  resign. 

26.  When  you  attend  a  meeting,  vote  to  do  something  and 

then  go  home  and  do  the  opposite. 

27.  Agree  to   everything  said  at  the  meeting  and  disagree 

with  it  outside. 

28.  When  asked  for  information,  don't  give  it. 

29.  Curse  the  association  for  the  incompleteness  of  its  in- 

formation. 

30.  Get  all  the  association  gives  you  but  don't  give  it  any- 

thing. 

31.  Talk  co-operation   for   the  other   fellow  with  you;   but 

never  co-operate  with  him. 

32.  When  everything  else  fails,  curse  the  secretary. 


MEETINGS  9S 

Those  who  have  had  experience  with  organizing  a  trade 
association  and  guiding  it  through  the  first  experimental  years 
will  appreciate  this  good-humored  recapitulation  of  the  diffi- 
culties arising  from  these  weaknesses  of  human  nature. 


CHAPTER  VIII 

COMMERCIAL  FUNCTIONS 

An  Association  a  Business  Venture 

When  a  man  joins  a  trade  association  he  joins  a  business 
organization.  He  may  be  a  member  of  some  board  of  trade 
or  chamber  of  commerce,  but  as  such  he  feels  that  he  is  more 
an  altruist  or  philanthropist  than  a  business  man.  He  is 
prompted  to  be  a  member  of  a  civic  organization  because  of 
a  local  pride  and  a  proper  desire  to  see  his  town  or  locality 
prosper.  As  his  town  or  city  may  prosper,  so  he  likewise 
will  get  certain  benefits;  but  fundamentally  he  is  a  member 
of  a  civic  organization  through  a  desire  to  help  somebody 
else  rather  than  to  further  his  personal  interests. 

When  he  joins  a  trade  association  it  is  on  a  more  or 
less  selfish  basis.  John  Jones,  for  instance,  did  not  engage  in 
the  milling  business  in  Indiana  for  the  purpose  of  assisting 
James  Brown  in  Massachusetts  to  live  a  more  pleasant  life. 
Mr.  Jones  began  his  milling  business  to  make  a  living  for 
Mrs.  Jones  and  his  family,  which,  although  in  a  more  critical 
sense  is  selfish,  is  not  in  the  least  unnatural  or  reprehensible. 
And  so  if  Mr.  Jones  and  Mr.  Brown  should  both  happen  to 
join  a  trade  association  made  up  of  millers,  they  would  do 
so  not  so  much  to  help  each  other  as  to  further  their  own 
individual  interests. 

But  of  course  while  the  bettering  of  one's  business  and 
general  affairs  may  be  a  man's  purpose  in  joining  a  trade 
association,  yet  in  a  little  while  he  gets  a  broader  vision, 
becomes  a  bigger  man,  and  consequently  is  often  willing  to 
help  the  other  man.  In  thus  helping  the  other  man  he  gains  at 
least  some  indirect  benefits  for  himself. 

96 


COMMERCIAL   FUNCTIONS  97 

Functions  of  Association 

A  trade  association  must  be  looked  on  not  as  a  charitable, 
civic,  or  impersonal  movement  but  as  a  business  organization 
conducted  by  a  business  man,  namely,  the  secretary.  As  a 
business  organization  the  trade  association  has  two  important 
groups  of  functions : 

1.  Its  commercial  functions,  which  are  its  activities  in 

connection  with  buying,  selling,  credits  and  collec- 
tions, etc. 

2.  Its  industrial  functions,  which  are  its  technical  activi- 

ties in  connection  with  economy  in  production,  in- 
formation relative  to  production,  standardization  of 
various  kinds,  etc. 

Commercial  Functions — Purchasing 

The  first  of  the  obvious  commercial  activities  of  a  trade 
association  has  to  do  with  improving  conditions  for  the 
purchase  of  raw  materials  and  supplies.  An  item  which 
largely  attracts  the  attention  of  the  association  member  is 
the  effect  of  his  association  membership  on  the  prices  of  his 
line  of  raw  materials.  It  is  surprising  to  the  uninitiated  to 
learn  how  wide  a  price  range  for  the  same  kind  of  materials 
may  exist  in  any  particular  industry.  This  is  especially  true 
where  goods  are  purchased  through  jobbers.  The  retail 
dealer  who  attempts  to  secure  a  standard  article  often  finds 
that  the  jobber's  price  is  so  near  the  listed  retail  price  that 
it  is  impossible  for  the  retailer  to  handle  the  article  at  a 
profit.  This  is  the  reason  why  many  manufacturers  advertise 
their  goods  to  ultimate  consumers  at  uniform  prices. .  A  good 
example  of  this  is  the  sporting  goods  catalogues. 

Advantage  of  Knowledge  of  Favorable  Prices 

If  a  merchant  discontinues  any  line  because  he  feels  there 
is  not  enough  profit  to  be  made — and  it  may  be  a  widely  de- 


98  TRADE   ASSOCIATIONS 

manded  product  at  that — he  not  only  loses  the  business  but 
drives  away  considerable  additional  patronage  that  would  be 
brought  to  him  through  the  sale  of  such  lines  of  goods.  The 
retailer  knows  that  other  dealers  are  handling  this  product 
at  a  profit  and  surmises,  therefore,  that  other  jobbers  are 
offering  more  favorable  prices.  He  is  handicapped,  however, 
by  not  knowing  what  is  the  best  price.  If  some  idea  could 
be  given  him  in  regard  to  the  prevailing  rates  he  would  be 
in  a  better  position  to  demand  fair  purchasing  prices. 

The  same  thing  applies  to  mills  in  their  purchase  of  raw 
materials.  For  this  reason  it  seems  most  desirable,  as  is 
shown  in  a  subsequent  chapter,  for  the  manufacturers, 
merchants,  or  retailers  to  exchange  among  themselves  prices 
at  which  materials  or  goods  have  been  purchased.  Of  course 
in  doing  this  care  must  be  exercised  that  there  shall  be  no 
agreement  or  collusion  to  make  a  producer  or  a  distributer 
sell  any  commodity  at  a  price  below  that  which  he  is  asking. 
Such  an  action  would  be  a  restraint  of  trade  and  therefore 
unlawful. 

Raw  Material  Information 

Some  associations  have  gone  even  farther  along  legal  lines 
than  merely  to  exchange  reports  on  purchases,  and  have 
actually  established  purchasing  or  price  bureaus  or  subsidiary 
associations  to  enable  their  members  to  buy  under  the  most 
favorable  conditions,  as  discussed  in  Chapter  XII.  Other 
associations  merely  exchange  among  the  members  information 
about  goods  purchased  and  prices  paid.  It  may  be  a  bureau 
of  information,  the  existence  of  which  is  necessitated  by  the 
inability  to  get  accurate  and  full  information  from  any  other 
source,  or  it  may  be  a  bureau  for  the  actual  purchase  and 
distribution  of  supplies.  No  averages  on  prices  are  struck, 
however,  and  no  particular  source  of  supply  is  recommended. 
The  purchaser  has  absolute  freedom  to  choose  from  whom 


COMMERCIAL   FUNCTIONS  99 

he  may  purchase  his  goods,  the  same  as  a  woman  when  she 
picks  up  her  morning  paper  and  looks  over  the  advertisements 
to  see  where  she  can  most  favorably  purchase  a  gown. 

By  a  system  of  confidential  reports  from  the  members, 
the  association's  files  are  kept  up  to  date  and  are  made  repre- 
sentative of  all  sections.  Members  secure  the  information 
contained  in  the  files  upon  request,  and  in  return  contribute 
their  own  experiences  when  asked.  (See  raw  material  re- 
ports in  Chapter  XVII.)  Contrary  to  what  one  might 
imagine,  this  system  offers  little  opportunity  for  favoritism 
or  discrimination.  The  usual  information  supplied  quotes  all 
the  figures  at  which  the  goods  in  question  are  being  offered  but 
does  not  divulge  the  name  of  the  concern  from  which  such 
prices  may  be  obtained.  The  purchaser,  upon  receiving  these 
prices,  can  then  see  what  the  range  is  and  determine  for 
himself  at  what  price  he  would  like  to  purchase  the  material 
or  goods. 

Selling 

Another  commercial  function  of  a  trade  association  has 
to  do  with  selling.  Problems  similar  to  those  described  in 
connection  with  the  purchase  of  goods  arise  also  in  connec- 
tion with  their  sale.  What  an  association  can  do  and  should 
do  in  this  field  is  as  yet,  however,  undetermined ;  and  it  is 
possible  here  to  take  up  the  subject  only  in  a  general  way  and 
note  broadly  a  few  points. 

First  of  all,  it  should  be  said  that  there  must  be  no  echo 
or  paralleling  of  the  old  monopolistic  pools.  Their  joint 
selling  arrangements  were  planned  merely  to  bring  immediate 
profit  to  the  members  of  the  pool.  An  association  must  be 
careful  that  if  any  arrangement  is  established  for  joint  selling 
there  is  no  attempt  or  desire  on  the  part  of  the  members, 
either  directly  or  indirectly,  to  impose  the  weight  or  power 
of  the  association  on  the  purchaser. 


lOO  TRADE   ASSOCIATIONS 

Costs 

The  matters  which  fall  within  the  scope  of  an  association's 
selling  bureau  have  to  do  mainly  with  marketing  conditions 
and  trade  practices,  but  only  in  a  minor  degree  with  price 
levels. 

So  far  as  prices  are  concerned,  indeed,  the  effort  of  the 
modern  association  is  chiefly  to  develop  and  disseminate  a 
scientific  attitude  towards  an  accurate  knowledge  of  them. 
For  example,  the  main  objects  of  the  National  Retail  Monu- 
ment Dealers  Association  are  to  improve  the  character  of 
cemetery  memorials  and  to  establish  a  standard  selling  price, 
not  by  legislation,  but  by  a  system  of  education  as  to  correct 
factory  costs.  Since  it  is  recognized  that  the  establishment 
of  a  fair  selling  price  is  directly  dependent  upon  a  proper 
knowledge  of  costs,  the  price  problem  is  not  now  so  much 
a  commercial  problem  as  it  is  a  production  or  industrial  one. 
In  subsequent  chapters  of  this  book  the  matter  of  costs  and 
also  that  of  legal  price  maintenance  are  discussed  more  in 
detail. 

T5^es  of  Distributers 

In  connection  with  selling,  one  important  matter  for  an 
association  is  a  clear  differentiation  between  manufacturer, 
jobber,  and  retailer  as  to  field  and  functions.  Price  demoral- 
ization is  often  a  result  of  misunderstanding  here  on  the 
part  of  one  or  more  of  these  distributers.  Concerns  of  differ- 
ent types  in  their  eagerness  for  business  often  encroach  on 
one  another's  fields,  thereby  not  only  seriously  damaging 
those  whose  business  they  have  taken,  but  also  injuring  them- 
selves and  the  trade  in  general.  For  instance,  a  manufacturer 
sells  to  a  retailer  at  the  manufacturer's  price  without  any 
regard  for  the  jobber.  This  places  the  jobber  at  a  hopeless 
disadvantage  for  he  cannot  attempt  to  meet  the  manufacturer's 
price. 


COMMERCIAL   FUNCTIONS  lOI 

The  Trade  Association  and  Distribution 

The  pohcy  of  a  trade  association  is  not  to  encourage  the 
manufacturer  to  sell  directly  to  the  dealer,  nor  the  jobber  to 
sell  directly  to  the  consumer.  Its  policy  is  one  of  "live  and 
let  live."  This  is  not  an  argument  for  or  against  the  middle- 
man. Whether  he  is  a  necessity  or  not  is  entirely  apart  from 
the  question  in  hand ;  he  exists,  and  since  he  exists  the  asso- 
ciation cannot  ignore  him.  It  is  outside  the  province  of  the 
trade  association  either  to  defend  him  or  to  take  an  unfair 
advantage  of  him.  If  the  manufacturer  sells  to  the  wholesaler, 
the  jobber  to  the  retailer,  and  the  retailer  to  the  consumer, 
the  association  recognizes  the  rights  of  all.  And  if  any  one 
of  these  factors  skips  the  next  logical  step  and  sells  over  the 
head  of  his  recognized  purchaser  to  that  purchaser's  customer, 
he  engages  in  a  practice  which  is  unfair. 

Manifestly,  it  would  be  wrong  for  a  manufacturer  to 
stock  regular  jobbing  distributers  with  goods,  and  then  go 
over  their  heads  and  sell  to  the  jobbers'  customers  at  lower 
prices  than  the  jobbers  could  sell.  It  has  been  done,  but  never 
with  continued  success;  some  concerns,  as  for  example  the 
Liggett  stores,  are  manufacturer,  jobber,  and  retailer. 

Through  trade  associations,  committees,  and  a  general 
system  of  education,  manufacturers,  wholesalers  or  jobbers, 
and  retailers  are  taught  to  respect  the  rights  of  the  customers 
of  all  the  others.  In  order  to  live  up  to  their  principles,  most 
associations  bar  from  associate  membership  concerns  which 
exercise  improper  functions.  The  modern  trade  association 
does  not  attempt  to  coerce  its  members ;  it  merely  keeps  them 
informed  about  actual  conditions  and  suggests  to  them  the 
best  and  most  effective  way  of  doing  business.  Thus  the 
selling  of  their  product,  while  not  handled  directly  by  the 
association,  can  by  the  proper  kind  of  principles  and  pub- 
licity on  the  part  of  the  association,  be  largely  influenced  for 
the  betterment  and  fairer  treatment  of  all. 


I02  TRADE   ASSOCIATIONS 

Terms  of  Sale  and  Discounts 

A  matter  to  which  an  association  cannot  safely  give  atten- 
tion is  that  of  terms  of  sale.  Often  a  seller  may  not  know 
when  the  allowance  of  money  or  time  which  he  gives  a 
customer  is  too  large  or  too  small.  Where  conditions  of  sale 
vary  widely  the  buyer  ordinarily  can  request  and  receive  the 
most  unusual  and  unwarranted  terms. 

But  under  the  law  a  trade  association  may  not  remedy 
this  condition.  It  may  not  adopt  a  standard  schedule  of 
discounts  and  terms  which  are  generally  observed  throughout 
the  trade  for  in  so  doing  it  is  agreeing  as  to  price,  since 
discounts  are  absorbed  by  and  are  therefore  a  part  of  price. 
And  it  is  just  as  legally  wrong  to  agree  as  to  part  of  the 
price  as  it  is  to  agree  as  to  the  whole  price. 

Cancellations 

Another  current  abuse  in  the  selling  of  goods  in  almost 
all  manufacturing  industries  is  found  in  the  tolerance  of  un- 
justifiable cancellation  of  orders  and  the  return  of  goods 
without  cause.  This  abuse  has  led  many  retailers  to  defer 
the  placing  of  their  orders  until  late  in  the  season,  for  then 
they  can  buy  orders  that  have  been  canceled  or  returned  at 
almost  their  own  price. 

Cancellations  and  returns  not  only  cause  a  direct  loss 
to  the  manufacturer  but  cause  a  great  loss  in  waste,  and 
therefore  have  become  distinctly  an  association  problem.  In 
order  to  eliminate  this  practice  a  number  of  associations  in- 
vestigate all  reported  cases  with  a  view  to  enforcing  the  rights 
of  their  members  by  lawsuit  if  necessary.  The  mere  fact  that 
the  other  manufacturers  are  willing  to  share  with  the  injured 
member  the  expense  of  such  litigation  is  indicative  of  the 
broad  attitude  with  which  these  organizations  regard  vexing 
trade  problems. 

Other    associations    handle    the    cancellation    and    return 


COMMERCIAL    FUNCTIONS  103 

questions  in  much  the  same  way  as  the  credit  rating  and 
reporting.  The  experience  of  members  with  their  various 
customers  is  recorded  carefully,  so  that  when  inquiry  is  made 
relative  to  the  standing  of  a  particular  dealer  the  answer  may 
show  whether  he  is  an  habitual  canceler  and  returner  of  goods. 

Advertising — Twofold  Function  of  the  Association 

The  trade  association  has  a  particularly  useful  function 
in  connection  with  the  important  and  diverse  phases  of  selling 
comprehended  under  advertising  and  publicity.  Its  activities 
of  this  sort  may  be  grouped  under  two  general  heads:  In 
the  first  place  the  association  can  do  a  great  deal  toward  in- 
creasing the  public  demand  for  the  product  of  the  industry 
which  it  represents.  In  the  second  place  the  association  can 
do  far  more  than  any  other  agency  toward  suppressing  dis- 
honest and  undesirable  advertising.  In  order  to  carry 
through  effectively  their  advertising  programs  many  associa- 
tions are  maintaining  regular  departments  or  bureaus  of  ad- 
vertising and  publicity. 

Increasing  the  Demand 

It  is  the  natural  desire  of  those  who  direct  any  business 
that  it  shall  grow,  and  become  of  greater  significance  and 
usefulness  in  the  community.  To  that  end  it  must  increase 
the  sales  of  the  commodity  it  deals  in  which  involves  increas- 
ing the  demand.  For  trade  associations,  the  systematic  effort 
to  increase  the  demand  for  the  products  of  the  industries 
they  represent  constitutes  an  important  activity. 

The  best  method  of  increasing  demand  is  by  way  of 
informative  advertising.  Thereby  the  story  of  the  value  of 
the  industry  is  brought  to  the  attention  of  the  public,  and 
the  public  is  educated  to  the  point  of  deciding  that  it  wants 
or  needs  the  article  advertised.  In  teaching  the  public  the 
value,  desirability,  and  method  of  using  a  product  or  service. 


I04  TRADE    ASSOCIATIONS 

associations  create  new  customers  and  increase  the  patronage 
of  old  ones.  Skookum  apples  and  Sunkist  oranges  are  de- 
manded on  the  Atlantic  Coast  from  the  Pacific  Coast  growers 
because  of  association  advertising,  shipping,  and  distributing. 
A  man  is  shown  the  healthful  advantage  of  eating  "an  apple 
a  day,"  or  the  various  ways  in  which  oranges  may  be  prepared, 
and  thus  an  increase  in  demand  is  created. 

The  trade  association  can  in  this  way  undertake  advertising 
which  is  not  competitive,  which  advertises  only  the  product 
of  the  industry.  That  is  to  say,  an  association  of  coffee 
dealers  would  advertise  coffee  merely  as  coffee,  and  not  any 
particular  brand.  Their  object  would  be  to  create  a  greater 
demand  for  coffee,  to  make  it  the  great  universal  drink  if 
possible  and  so  increase  the  sales  of  all  brands  of  coffee,  thus 
benefiting  every  dealer  in  the  association.  Therefore  associa- 
tion advertising  is  independent  and  exclusive  and  on  the  order 
of  direct,  collective  propaganda.  It  educates  the  public  in 
general  basic  principles  which  apply  to  all  varieties  of  the 
particular  product. 

"Pooled"  Advertising 

By  reason  of  the  money  that  can  be  utilized  "pooled" 
advertising,  another  name  for  association  advertising,  is 
always  far  more  efficacious  and  wide-spread  than  individual 
advertising.  The  Portland  Cement  Association  regularly 
expends  hundreds  of  thousands  of  dollars  a  year  merely  in 
showing  the  advantages  of  good  material  and  workmanship 
in  roads,  houses,  barns,  walls,  pig-pens,  and  all  such  buildings 
and  construction  work,  as  most  people  deal  only  with  the 
medium  of  wood. 

Of  course  with  a  product  like  Portland  cement  this  can  be 
done  with  comparative  ease,  because  Portland  cement  is  sim- 
ply Portland  cement;  whereas  an  article  such  as  a  piano, 
which,  through  the  efforts  of  man's  ingenuity  working  on  a 


COMMERCIAL    FUNCTIONS  I05 

mixture  of  materials  is  a  product  with  which  those  materials 
primarily  had  no  particular  relation,  presents  an  individuality 
which  demands  exclusive  advertising.  And  yet  the  Music 
Industries  Chamber  of  Commerce,  being  a  combined  associa- 
tion of  the  producers  of  all  kinds  of  musical  instruments,  even 
those  of  a  mechanical  nature  such  as  the  phonograph,  is 
making  a  national  effort  to  create  a  greater  appreciation  of 
music.  The  thought  is  that  when,  later  on,  each  member 
comes  to  advertise  his  product  separately,  he  may  find  a  greater 
response  to  his  individual  efforts. 

Various  Methods  Employed 

The  Laundrymens  National  Association  of  America  has 
endeavored  through  a  recently  conducted  publicity  campaign 
to  show  the  public  what  a  modern  American  laundry  really 
is,  with  the  result  that  people  are  ready  to  send  more  of  their 
delicate  goods  to  laundries,  which  they  had  previously  sup- 
posed were  equipped  with  something  like  threshing  machines. 
A  series  of  pictures  showed  how  carefully  all  goods  were 
handled  in  a  modern  laundry. 

Prominent  among  the  associations  that  have  been  con- 
ducting advertising  campaigns  with  the  object  of  increasing 
the  demand  for  their  product  are  those  representing  lumber 
industries.  To  explain  the  value  of  their  lumber  either  for 
structural  or  for  flooring  purposes  these  associations  have 
been  making  extensive  use  of  magazine  advertising. 

An  excellent  example  of  how  such  advertising  is  handled 
may  be  found  in  the  activities  of  an  association  which  repre- 
sents another  structural  commodity — brick.  The  American 
Face  Brick  Association  is  increasing  the  demand  for  its  prod- 
uct by  advertising  the  beauty  of  houses  constructed  of  that 
material. 

Another  instance  is  that  of  the  canning  industry.  This 
work    during    recent    years    has    undergone    many    changes. 


lo6  TRADE   ASSOCIATIONS 

Through  the  introduction  of  pure  food  laws,  provisions  for 
uniform  grading,  and  regulations  as  to  branding,  canned  goods 
have  been  greatly  improved  and  have  become  a  safe,  inex- 
pensive, palatable,  and  convenient  form  of  food.  The 
National  Canners  Association,  by  conducting  a  splendid 
laboratory  in  Washington  for  research  work,  and  by  impress- 
ing upon  the  public  the  purity  and  perfection  of  their  product, 
have  overcome  much  of  the  former  prejudice  against  canned 
goods,  with  a  consequent  increase  in  the  total  consumption. 

Slogans 

In  a  somewhat  similar  way  the  florists,  with  "Say  it  with 
Flowers,"  have  started  a  national  slogan  which  suggests  action 
and  results  in  an  increase  in  the  use,  and  hence  in  the  sale  of 
flowers.  Many  associations  use  slogans  which  catch  the  atten- 
tion and  suggest  action  toward  their  respective  products. 

Indirect  Advertising 

One  of  the  methods  used  by  the  Automobile  Dealers 
Association  to  increase  the  sale  of  autos  has  been  their  effort 
to  combat  hostile  legislation  such  as  might  possibly  discourage 
the  use  of  automobiles.  By  opposing  in  state  or  city  ill-advised 
measures  for  traffic  regulation  or  ordinances  otherwise  in- 
imical to  the  welfare  of  the  trade,  and  at  the  same  time 
advocating  favorable  measures,  the  Automobile  Dealers  Asso- 
ciation has  been  constantly  improving  conditions  for  the  auto- 
mobile user. 

This  method  of  advertising  may  be  called  "indirect."  It 
is  helping  to  create  a  demand  for  automobiles  by  eliminating 
conditions  that  make  owning  or  driving  one  disagreeable. 

Exhibitions 

Trade  associations  or  groups  of  allied  industries  some- 
times undertake  to  emphasize  the  importance  and  value  of 


COMMERCIAL    FUNCTIONS  10? 

their  products  by  means  of  exhibitions.  They  feature  either 
the  product  itself  or  the  processes  of  manufacture,  and  utihze 
working  models,  motion  pictures,  or  other  means.  This  ten- 
dency sometimes  leads  to  what  are  known  as  industrial  fairs, 
which  in  various  forms  are  becoming  popular  in  this  country 
as  a  means  of  educating  the  public  to  an  appreciation  and  a 
consequent  increased  use  of  the  various  products  exhibited. 

The  machinery  hall  at  one  of  our  state  fairs  is  a  familiar 
type  of  industrial  fair  on  a  small  scale.  The  Leipzig  Fair  in 
Germany  is  an  outstanding  instance  of  a  much  more  extensive 
sort  of  industrial  exhibition,  which  American  manufacturers 
are  seriously  thinking  of  developing. 

Another  variety  of  exhibition  is  the  traveling  fair.  This 
may  be  of  many  kinds:  the  exhibition  may  travel  on  a  "fleet" 
of  automobiles,  as  in  the  case  of  some  exhibits  by  makers  of 
farm  implements  and  supplies ;  it  may  be  in  a  railway-car,  like 
the  exhibit  of  the  United  States  Fish  Commission;  or  it  may 
be  on  an  ocean  liner,  such  as  the  exhibition  of  American-made 
goods  which  has  recently  visited  all  the  great  ports  of  the 
world. 

Motion  Pictures 

Motion  pictures  are  also  widely  used  not  only  by  individual 
manufacturers  but  by  associations  in  carrying  forward  propa- 
ganda to  gain  the  understanding  and  appreciation  of  the  public 
for  the  importance  of  their  industry  and  product. 

The  Ford  Motor  Company  through  its  educational  films, 
which  have  a  wide  distribution  throughout  the  country,  is 
doing  much  to  educate  the  people  as  to  how  different  products 
are  made.  In  this  the  Ford  Motor  Company  have  prepared 
most  of  their  films  of  an  industry  under  the  direction  of  the 
particular  industry's  trade  association.  And  in  thus  under- 
standing the  simple  process  of  the  manufacture  of  these  prod- 
ucts the  public  is  rightfully  led  to  appreciate  their  value. 


Io8  TRADE   ASSOCIATIONS 

Overstimulation  of  Sales  a  Danger 

Like  everything  else,  however,  this  effort  to  create  greater 
demand  can  be  overdone  and  associations  in  seeking  to  increase 
sales  may  crowd  the  market  too  much.  A  striking  instance 
of  market  crowding  is  that  of  the  United  States  Brewers  Asso- 
ciation which  by  establishing  too  many  saloons  made  it  neces- 
sary for  them,  in  order  to  pay  overhead  expenses,  to  handle 
hard  liquors  as  well  as  light  wines  and  beers.  The  result  was 
national  prohibition  which,  though  directed  primarily  at  hard 
liquors,  has  likewise  eliminated  the  brewing  and  sale  of  beer. 
If  a  number  of  years  ago,  the  United  States  Brewers  Associa- 
tion had  followed  the  advice  which  they  at  that  time  received 
and  had  separated  themselves  from  the  hard  liquor  business, 
prohibition  might  not  have  come  at  all;  and  if  it  did  come  it 
would  doubtless  have  affected  only  the  hard  liquors. 

Raising  the  Funds 

When  an  association  has  decided  on  an  advertising  cam- 
paign adequate  funds  must  be  raised  whereby  the  campaign 
can  be  carried  on.  These  funds  can  be  raised  through  assessing 
each  member  according  to  some  unit  of  production,  such  as 
pounds,  feet,  numbers,  gross  sales,  or  on  mercantile  rating. 
For  instance,  the  funds  for  a  recent  campaign  of  the  Metal 
Lath  Association  were  raised  by  basing  the  member's  assess- 
ment on  the  number  of  square  yards  of  metal  lath  he  sells; 
and  the  funds  for  a  similar  campaign  of  the  Granite  Manu- 
facturers Association  at  Barre,  Vermont,  were  raised  by 
assessing  each  participating  member,  on  a  basis  of  the  rough 
cubic  feet  of  stone  coming  from  the  quarries. 

The  Joint  Coffee  Trade  Publicity  Committee  of  the  United 
States  is  raising  funds  for  its  advertising  and  educational 
campaign  by  a  method  that  is  unique.  It  has  secured  the  co- 
operation of  the  Brazilian  planters  and  through  their  inter- 
cession the  government  is  levying  a  tax  of  lOO  reis  on  every 


COMMERCIAL   FUNCTIONS  I09 

bag  of  coffee  that  arrives  at  the  junction  points  of  Sao  Paulo, 
the  money  so  collected  being  remitted  to  the  Joint  Coffee 
Trade  Publicity  Committee  in  monthly  instalments. 

Suppressing  Dishonest  Advertising 

The  second  of  the  special  duties  of  an  association  in  con- 
nection with  advertising  and  publicity  is  the  suppression  of 
dishonesty  and  misrepresentation. 

Associations  are  interested  in  the  truth  of  all  advertise- 
ments of  their  product,  whether  issued  by  the  association  itself 
or  by  members.  Dishonest  advertising  has  been  referred  to 
as  the  "black  flag  at  the  mast-head  of  the  mercantile  pirate." 
Aside  from  the  ethical  and  moral  arguments  there  are  many 
economic  and  business  reasons  against  dishonest  advertising. 
That  the  consumer  is  hurt  by  misleading  statements  is  obvious ; 
but  he  is  by  no  means  the  only  one  injured. 

For  years  the  policy  of  misrepresentation  reaped  such  rich 
rewards  that  honest  merchants  were  seriously  handicapped  in 
the  race  for  business.  That  is  to  say,  if  a  merchant  advertised 
his  business  soberly  and  honestly  he  had  little  chance  with  the 
merchant  who  made  extravagant  and  specious  claims  for  the 
commodity  in  which  he  dealt.  If,  again,  a  merchant  did  not 
make  guarantees  for  goods  which  he  knew  could  not  be 
guaranteed,  or  guaranteed  them  only  as  their  quality  war- 
ranted, how  could  he  compete  with  the  man  who  made  wholly 
misleading  and  dishonest  guarantees?  The  public  could  not 
distinguish  between  the  two  commodities  until  it  had  bought 
one  of  them ;  and  it  nearly  always  bought  the  one  for  which 
tlie  more  alluring  claims  w^ere  made.  The  natural  result  was 
that  after  a  time  the  public  became  suspicious  of  all  dealers; 
and  the  honest  dealers  who  had  not  sown  this  suspicion  reaped 
its  results  as  well  as  those  who  were  responsible  for  it. 

The  associations  have  realized  the  evils  attendant  on  this 
condition,  and  are  remedying  them. 


no  TRADE    ASSOCIATIONS 

Supervision  and  Control 

The  first  step  taken  by  an  association  to  insure  truthful 
advertising  is  to  insist  that  all  members  employ  only  legitimate 
methods  of  publicity.  By  disqualifying  violators  of  the  code 
of  ethics  after  due  warning  is  given  some  associations  cause 
membership  to  be  regarded  as  a  mark  of  trade  approval. 

An  illustration  of  this  attitude  is  found  in  the  methods  of 
the  National  Association  of  Piano  Merchants  of  America. 
The  piano  trade  at  one  time  was  rather  largely  afflicted  with  a 
prevalent  advertising  abuse  in  the  form  of  special  sales,  buying 
clubs,  and  other  extraordinary  offers.  It  is  needless  to  go  into 
the  details  of  these  schemes,  for  they  all  practically  amount 
to  a  gross  misrepresentation  of  merchandise.  And  yet,  owing 
to  the  equivocal  tenor  of  such  advertisements,  it  was  difficult 
to  prove  that  fraudulent  representations  had  been  made.  The 
names  of  well-known  makes  of  pianos  were  brought  into  dis- 
repute through  incongruous  relationships,  and  the  legitimate 
dealers  and  makers  suffered  from  the  transgressions  of  others. 

It  was  this  condition  that  led  the  National  Association  of 
Piano  Merchants  to  adopt  the  following  policy: 

This  Association  condemns  the  practice  of  advertising 
instruments  in  regularly  carried  lines  unless  the  advertiser 
ofifers  them  in  good  faith  and  stands  ready  to  sell  said  instru- 
ments at  once  to  any  buyer. 

Methods  of  Insuring  Honesty 

The  way  in  which  the  National  Association  of  Piano  Mer- 
chants of  America  pursues  its  work  for  the  so-called  uplift 
plan  of  truthfulness  in  advertising  is  typical  of  the  methods 
of  most  associations  engaged  in  similar  activities.  Reforms  in 
the  piano  trade  are  being  accomplished : 

I.  By  invoking  the  aid  of  the  Post-Office  Department, 
the  most  effective  way  of  exterminating  guessing 
and  other  forms  of  contest  advertising. 


COMMERCIAL    FUNCTIONS  "I 

2.  By  calling  upon  the  state  legislature  for  enactment  of 

a  law  making  it  an  offense  punishable  by  fine  and  if 
necessary  imprisonment  to  issue  any  forms  of  mis- 
leading advertisements  that  are  hurtful  to  the  mor- 
als, health,  and  pocket-books  of  the  public. 

3.  By  bringing  some  pressure  to  bear  on  manufacturers 

who  are  made  unintentional  parties  to  fraud  through 
permitting  the  use  of  their  names  and  reputations 
without  protest,  and  by  bringing  strong  pressure  to 
bear  on  manufacturers  who  aid  and  abet  these 
scheme-artists  in  their  practice  of  humbugging  the 
public. 

4.  By  dropping  from  membership  those  concerns  that  fail 

to  comply  with  the  spirit  and  letter  of  the  association 
constitution. 

A  Bureau  of  Advertising  and  Publicity 

Trade  associations  are  more  and  more  learning  that  in 
order  to  handle  their  activities  in  connection  with  advertising 
they  need  a  well-organized  advertising  department  or  bureau, 
under  the  direction  of  a  competent  and  experienced  advertising 
man.  Such  a  bureau  can  be  of  use  not  only  to  the  association 
as  a  whole  but  also  to  the  members  individually. 

Services  to  the  Association 

Whatever  advertising  is  done  must  be  carefully  planned 
and  must  be  supervised  by  a  manager  of  considerable  experi- 
ence. No  association,  any  more  than  an  individual  manufac- 
turer, should  attempt  any  advertising  unless  it  intends  to  go 
the  limit  and  to  have  faith  in  indirect  results.  Temporary 
advertising  is  merely  a  "flash  in  the  pan" — money  thrown 
away.  The  benefits  of  advertising  to  an  individual  or  to  an 
association  are  cumulative ;  being  indirect  it  needs  considerable 
money  and  faith  behind  it.     But  not  even  a  liberal  supply  of 


112  TRADE   ASSOCIATIONS 

money  and  faith  can  produce  full  results  unless  such  adver- 
tising is  handled  by  an  expert  who  knows  how  and  where  to 
place  it.  With  a  competent  man  in  charge,  a  well-organized 
bureau  can  be  developed  which  can  make  a  systematic  study 
of  publicity  problems  in  their  manifold- and  intricate  relations. 

Services  to  Individual  Members 

Such  a  bureau  can  be  of  great  assistance  to  the  association 
members  individually,  besides  furnishing  sound  and  construc- 
tive advice  for  the  conduct  of  legitimate  and  effective  adver- 
tising. For  one  thing,  by  means  of  a  general  mailing  list 
worked  up  by  such  a  bureau,  a  vast  amount  of  unnecessary 
duplication  of  mail  matter  may  be  saved.  By  getting  all  the 
members  to  contribute  their  mailing  lists  to  this  general  one 
duplications  can  be  eliminated  and  a  complete  list  can  be  made 
up  for  the  industry.  When  members  have  notices  of  general 
interests  to  be  mailed  this  bureau  can  handle  the  matter,  and 
coming  from  such  a  source  the  notices  are  likely  to  receive 
more  particular  attention. 

The  service  activities  of  such  a  bureau  with  regard  to  the 
individual  members  may  be  stated  more  specifically  as  follows : 
( I )  to  assist  members  in  the  development  of  their  own  busi- 
nesses through  the  judicious  use  of  modern  advertising 
methods;  and  (2)  to  provide  practical  advertising  assistance 
and  service  to  members  in  behalf  of  their  customers.  In  other 
words  the  advertising  bureau  of  the  association  is  also  the 
advertising  department  for  any  one  of  the  members'  com- 
panies, to  be  used  whenever  needed.  This  does  not  mean  that 
a  large  company  which  has  its  own  advertising  department 
need  give  it  up  and  have  its  advertising  done  by  the  association 
bureau,  nor  that  any  member  is  at  all  obligated  to  make  use  of 
the  bureau  in  this  way,  merely  that  all  members  and  their 
advertising  departments  are  free  at  any  time  to  receive  the 
assistance,  when  they  desire  it,  of  the  association  bureau. 


CHAPTER  IX 

INDUSTRIAL  FUNCTIONS 

Range  ■» . 

The  industrial  functions  of  a  trade  association  are  of  a 
technical  or  scientific  character.  They  embrace  a  study  of 
sources  of  supply,  conservation  and  classification  of  raw 
materials,  standardization  of  manufacturing  and  operating 
processes,  packing  and  marketing  of  product,  and  shipping. 

Information  Regarding  Materials 

We  have  already  considered  the  conditions  under  which 
materials  are  bought ;  let  us  now  consider  the  materials  them- 
selves. Since  the  value  and  cjuality  of  the  finished  product  are 
dependent  upon  the  supply  of  raw  material,  manufacturers 
must  have  some  idea  of  the  amount  available. 

Many  trade  associations  supply  such  information  in  the 
form  of  comparative  charts,  statistical  tables,  and  reports.  The 
character  of  this  information  is  of  course  affected  largely  by 
the  nature  of  the  trade  for  which  it  is  procured.  In  the  silk 
goods  industry,  by  way  of  illustration,  the  best  measure  of 
available  material  is  found  in  the  records  of  the  imports  of 
raw  silk.  Recognizing  the  value  of  such  information,  the 
Silk  Association  of  America  maintains  a  bulletin  service  con- 
sisting of  four  different  periodical  publications.  These  bul- 
letins classify  silk  imports,  show  quality,  foreign  invoice  value, 
duty  collected,  pound  value,  average  duty  per  pound,  and  ad 
valorem  rates.  In  addition,  the  regular  reports  of  the  associa- 
tion contain  estimates  of  the  silk  crop  for  the  coming  year, 
together  with  figures  of  preceding  years  and  statistical  tabula- 
tions covering  every  phase  of  the  industry. 

113 


114  TRADE    ASSOCIATIONS 

Likewise  the  cotton,  leather,  textile,  paper,  rubber,  steel, 
and  other  trade  associations  maintain  for  their  members 
similar  information  as  to  sources  of  supply  of  their  raw  ma- 
terials. 

Standardization  of  Raw  Materials 

A  number  of  associations,  by  co-operating  with  raw 
material  dealers  who  themselves  have  associations,  have 
brought  about  a  standardization  of  raw  materials  to  facilitate 
intelligent  buying.  For  instance,  in  the  selling  of  rags  to 
paper-mills  a  number  of  the  raw  material  dealers  used  to  call 
various  kinds  of  rags  by  different  names,  which  led  to  great 
confusion.  The  paper  manufacturers  persuaded  the  raw 
material  dealers  to  adopt  definite  names  and  gradings  for  spe- 
cific qualities  or  kinds  of  rags.  Nowadays  when  a  paper 
manufacturer  purchases  a  certain  quality  of  rags  by  a  specific 
name  he  knows  exactly  what  he  is  getting. 

Standardization  and  Price 

Unless  the  manufacturer,  merchant,  or  retailer  understands 
just  what  quality  of  material  he  is  buying  the  price  means 
little  to  him.  A  single  grade  of  raw  material  or  of  finished 
product  may  be  known  by  a  score  of  quality  names,  while  the 
wide  variation  of  methods  of  packing  and  of  widths  and 
lengths  makes  it  practically  impossible  for  the  purchaser  to 
compare  values  on  a  fair  basis.  To  overcome  these  irregular 
and  misleading  conditions  associations  are  insisting  upon 
greater  uniformity  in  the  grading  of  materials  and  products. 
In  this  connection  one  example  will  suffice,  that  of  the  inspec- 
tion department  of  the  National  Hardwood  Lumber  Associa- 
tion, employing  over  lOO  inspectors,  who  continually  inspect 
all  hardwood  lumber  throughout  the  country. 

Other  examples  of  standardization  of  raw  material  could 
be  given,  but  all  are  similar  and  all  go  to  establish  the  general 


INDUSTRIAL   FUNCTIONS  I^S 

rule  that  the  raw  material  dealers  in  their  association  should 
standardize  for  the  manufacturers,  just  as  the  manufacturers 
should  standardize  for  the  wholesalers,  the  wholesalers  for 
the  retailers,  and  the  retailers  for  the  ultimate  consumers. 
Thus  through  eliminating  incorrect  names  and  needless  vari- 
eties larger  production  is  secured  at  a  lower  cost,  with  a  con- 
sequent lower  price. 

Conservation 

Once  awake  to  the  question  of  supply,  the  progressive 
business  man  begins  to  consider  his  sources  of  material  from 
the  point  of  view  of  an  effort  to  extend  old  sources  and  to 
discover  new  ones.  One  of  the  best  methods  of  increas- 
ing the  available  supply  of  the  product  needed  for  manu- 
facturing is  through  the  conservation  of  its  sources.  The 
lumber  industry  faces  the  serious  problem  of  a  rapidly  dimin- 
ishing supply  of  timber.  The  Forestry  Commission  of  the 
National  Wholesale  Lumber  Dealers  Association  was  organ- 
ized for  perpetuating  the  raw  material  which  forms  the 
basis  of  all  lumber  business.  The  efforts  of  this  body  are 
exerted  chiefly  along  educational  lines  and  in  making  recom- 
mendations for  favorable  legislation. 

The  paper  industry  likewise  will  be  faced  with  a  serious 
pulp  shortage  in  a  little  more  than  a  score  of  years  unless 
reforestation  is  immediately  undertaken  to  offset  the  diminish- 
ing supply  of  spruce  wood.  How  necessary  it  is  to  preserve 
the  dwindling  spruce  forests  can  readily  be  appreciated  when 
one  considers  that  a  single  large  metropolitan  newspaper  con- 
sumes 25  acres  of  woodland  in  a  single  Sunday  issue,  although 
of  all  lumber  annually  cut  in  this  country  the  paper  and  pulp 
industry  consumes  only  7  per  cent  of  the  total.  The  American 
Paper  and  Pulp  Association  only  recently  has  selected  for  its 
secretary  the  former  dean  of  one  of  the  largest  schools  of 
forestry  in  the  United  States,  in  order  to  be  better  able  to 


Il6  TRADE    ASSOCIATIONS 

provide   for  the   immediate  conservation  of   the  natural   re- 
sources of  the  industry. 

New   Sources   of  Material 

A  few  of  the  more  important  national  associations  are 
constantly  conducting  scientific  research  to  find  new  sources 
of  material.  Any  practical  discoveries  resulting  from  this 
work  immediately  become  the  property  of  the  entire  industry. 

The  scientific  bureau  of  the  National  Association  of  Paint 
Manufacturers  is  studying  the  best  methods  of  raising  the  flax 
plant  from  which  linseed  oil  is  made,  and  is  testing  the  value 
of  substitutes.  The  ordinary  manufacturer  could  not  afford 
to  spend  the  necessary  funds  to  conduct  work  of  this  kind, 
nor  would  he  be  particularly  concerned  about  the  supply  of 
his  raw  materials  beyond  the  immediate  future.  The  spirit 
and  possibilities  of  the  trade  association  make  this  type  of 
activity  a  reality. 

Economies  in  Production 

One  of  the  best  ways  of  conserving  raw  materials  is  to 
eliminate  waste  in  production  and  to  discover  new  ways  to 
utilize  by-products.  Some  associations  are  doing  a  great  deal 
with  regard  to  this  point.  Systematic  study  of  waste  and  of 
the  utilization  of  waste  materials  by  specialists,  and  informa- 
tion offered  by  members  themselves,  constantly  increase  the 
efficiency  of  the  industry  concerned.  Careful  records  of  waste 
materials  are  compiled  from  information  received  from  the 
many  factories  contained  in  an  association,  and  these  are  issued 
to  members  as  aids  to  production  efficiency. 

The  American  Newspaper  Publishers  Association  compiles 
quarterly  reports  of  pressroom  waste  which  show  the  com- 
parative efficiency  or  inefficiency  of  various  newsprint-mills 
and  pressroom  hands,  a  work  that  profits  the  publishers  and 
improves  mill  service  and  pressroom  handling  of  paper. 


INDUSTRIAL    FUNCTIONS  117 

Two  other  essential  association  activities  in  connection 
with  manufacturing  and  operation  are  those  of  trade-schools 
and  costs,  which  are  discussed  in  later  chapters. 

General  Research  Work 

A  number  of  associations  carry  on  laboratories  for  general 
research  work.  The  National  Association  of  Master  Bakers  is 
establishing  a  large  laboratory  in  Washington  where  various 
experiments  in  making  bread,  pie,  and  cake  will  be  carried  on 
with  different  kinds  of  grains,  and  the  results  reported  to  the 
members  of  the  association. 

Many  examples  could  be  cited  of  different  associations 
which  carry  on  work  that  looks  toward  higher  and  more 
uniform  standards  in  their  industry,  but  the  facts  and  advan- 
tages of  such  work  are  obvious  without  the  necessity  of  further 
illustration. 

Manufacturing  Operations 

Once  the  raw  material  is  purchased  the  manufacturer  or 
producer  is  confronted  with  the  problem  of  creating  his  prod- 
uct. Then  appears  one  of  the  chief  benefits  of  the  association. 
The  great  mass  of  experience  obtained  from  members  is 
ahvays  available  for  the  use  of  any  one  member.  In  particular, 
the  old  idea  that  every  mill  must  be  closed  to  all  competitors 
as  all  processes  are  secret  has  been  done  away  with.  There 
are,  of  course,  certain  secret  processes  for  the  making  of 
specialties  which  manufacturers  have  covered  by  patents,  or 
which  for  some  other  reason  are  not  divulged ;  but  as  a  general 
rule  every  factory  is  now  open  to  competitors,  who  are  free 
to  walk  through  at  any  and  all  times  and  to  pick  up  any  sug- 
gestions of  which  they  may  approve. 

This  opening  of  the  factories  and  manufacturing  processes 
to  the  inspection  of  competitors  is  a  good  thing,  for  two 
reasons.     In  the  first  place,  if  such  an  inspection  can  help  the 


Il8  TRADE   ASSOCIATIONS 

competitor  improve  his  product  the  whole  quahty  of  the  in- 
dustry is  brought  up  that  much  more,  without  appreciable 
hindrance  to  the  sales  of  the  men  who  furnished  the  informa- 
tion. In  the  second  place,  the  man  who  opens  his  factory  to  a 
competitor  may  receive  from  that  competitor  some  suggestion 
quite  as  valuable  as  that  which  he  imparts.  This  is  not  a 
theory,  but  a  fact;  the  manufacturers  affirm  that  it  has  proved 
true  a  great  many  times. 

Experimental  Departments 

Apart  from  the  vast  storehouse  of  collective  information 
brought  out  in  the  discussions  at  meetings,  some  associations 
conduct  experimental  departments  in  which  new  methods  are 
carefully  tested.  Any  new  development  of  interest  to  the 
trade  is  promptly  given  to  all  the  members. 

Carefully  prepared  tables  showing  technical  details,  manu- 
facturing formulas,  and  machine  operations  are  circulated 
throughout  the  trade.  Special  inquiries  made  by  members  in 
regard  to  some  phase  of  production  are  answered  by  well- 
qualified  men,  often  experts  in  the  particular  field  concerned. 
Information  of  special  interest  may  be  distributed  either  by 
detailed  reports  or  by  means  of  an  exhibition  of  material 
results  sent  from  one  member  to  another;  or  it  may  be  de- 
posited at  some  point  accessible  to  several  members. 

Some  of  the  large  national  associations  have  developed,  as 
subordinate  or  affiliated  bodies,  technical  associations  the 
activities  of  which  are  discussed  in  Chapter  XII. 

Standardized  Production 

Some  industries  have  within  themselves  certain  practices 
which  are  most  undesirable,  particularly  too  wide  a  variation 
of  standards.  The  recent  war  brought  out  some  interesting 
cases  when  the  War  Industries  Board  attempted  to  regulate 
the  different  industries  of  the  country. 


INDUSTRIAL   FUNCTIONS  1^9 

It  was  found  that  the  saw  manufacturers  were  making 
more  than  lOO  different  kinds  of  saws  whose  patterns  were 
simply  duphcations  and  wholly  unnecessary.  The  bathtub 
manufacturers  were  making  numberless  bathtubs  with  differ- 
ences so  slight  that  the  average  man  could  not  tell  them  apart ; 
one  standard  bathtub,  for  example,  had  a  roll  of  3  inches, 
another  a  roll  of  2  inches,  and  another  a  roll  of  i  inch;  but 
who  ever  noticed  in  getting  soberly  into  a  bathtub  how  much 
of  a  "roll"  there  was  on  it,  provided  the  tub  looked  reasonably 
well  designed? 

As  a  matter  of  economy,  the  War  Industries  Board  com- 
pelled the  manufacturers  of  saws,  plows,  bathtubs,  corsets, 
paper,  lumber,  glassware,  and  all  common  commodities,  to  stop 
making  an  endless  number  of  designs  which  were  really  un- 
necessary and  had  been  created  only  to  suit  the  caprice  of 
dealers. 

So  sensible  and  advantageous  was  this  method  of  compul- 
sory standardization  that  no  industry  which  experienced 
regulations  of  this  kind  will  ever  go  back  to  making  as  many 
varieties  of  the  product  as  it  did  before.  By  concentrating  on 
a  few  standards  production  can  be  increased  and  production 
prices  can  be  made  more  reasonable;  and  all  without  any  in- 
dividuality being  lost. 

Educating  the  Public  in  Standards 

Other  standards  may  be  those  of  quality,  color,  finishing, 
packing,  and  shipping.  These  standards  can  be  established 
when  the  manufacturers  get  together  and  decide  on  wliat 
should  be  the  best  practices  to  follow.  Then  trade  customs 
can  be  established  and  adopted  by  all  the  members.  A  mem- 
ber, however,  should  not  be  compelled  by  a  fine  or  a  threat  to 
adhere  to  a  trade  custom,  for  then  he  approaches  it  in  the 
wrong  attitude  of  mind.  He  should  be  so  thoroughly  con- 
vinced of  the  economic  advantages  to  him  in  following  such 


I20  TRADE   ASSOCIATIONS 

practices  that  he  will  voluntarily  follow  the  suggested  cus- 
tom. 

Of  course  there  are  certain  people  who  can  never  be 
convinced,  who  do  not  and  will  not  live  up  to  trade  customs. 
It  is  sometimes  hard  for  a  salesman  to  insist  on  certain  trade 
standards  and  not  yield  to  the  wish  of  a  buyer  when  that  buyer 
insists,  very  often  wrongly,  that  the  salesman's  competitors 
will  make  the  proposed  concessions  and  therefore  that  he 
would  expect  them  from  the  salesman  himself.  But  after  pur- 
chasers begin  to  realize  the  advantages  to  them  of  uniform 
practices  upon  the  part  of  the  producers  or  distributers  of  a 
product,  they  will  engage  less  and  less  in  the  sharp  practice  of 
endeavoring  to  get  some  little  concession  in  order  that  the 
product  which  they  purchase  may  seem  to  be  a  little  different 
from  that  purchased  by  somebody  else. 

United  States  Bureau  of  Standards 

The  United  States  Bureau  of  Standards  in  Washington  is 
also  carrying  on  a  splendid  work  for  all  industries  in  the 
country,  in  establishing  accurate  grading  or  standardization  of 
products.  Any  industry  which  has  come  in  contact  with  this 
bureau  has  learned  its  value.  And  any  trade  association  that 
has  not  acquainted  itself  thoroughly  with  what  this  bureau 
with  its  wonderful  equipment  can  do  for  an  industry  had  better 
lose  no  time  in  finding  out  all  it  can  about  this  service. 

The  Association  and  Labor 

Another  industrial  function  of  an  association  is  that  of 
encouraging  among  its  members  the  right  attitude  towards 
labor,  which  of  course  is  a  chief  element  in  production  and 
in  costs. 

This  statement  does  not  in  the  least  mean  that  a  trade 
association  can  assume  in  any  way  the  position  of  an  em- 
ployers' organization,  or  be  a  body  with  which  the  labor  unions 


INDUSTRIAL    FUNCTIONS  121 

can  in  any  way  deal  except  in  some  instances  by  committees. 
Matters  of  wage  adjustment  and  hours  of  labor  are  for  indi- 
vidual or  territorial  group  determination  and  not  for  trade 
association  consideration.  The  association  should  only  estab- 
lish the  broad  principles  for  industrial  relations  and  never 
as  an  association  take  part  in  labor  adjustments. 

Association  Not  to  Settle  Wage  Questions 

Where  the  membership  is  extended  all  over  the  country 
it  is  impossible  for  an  association  to  bring  about  wage  sched- 
ules or  working  arrangements  which  will  be  satisfactory  to  all 
members.  Different  localities  make  different  conditions  and 
different  scales  of  wages;  some  mills,  for  example,  may  be 
closed  shops,  others  may  be  open  shops,  others  non-union 
shops  entirely.  The  association  that  avoids  dealing  with  labor 
unions  avoids  also  a  great  many  difficulties  and  the  possibilities 
of  discord  and  disorganization. 

What  the  Association  Can  Do 

The  purposes  which  an  association  in  its  relation  to  em- 
ployees can  officially  undertake  are  chiefly  as  given  in  the  fol- 
lowing: to  encourage  Americanization  among  the  operatives; 
improve  working  conditions  in  the  mills ;  discourage  any  kind 
of  labor  which  is  morally  wrong  and  thus  hurts  the  reputation 
of  the  industry,  such  as  child  labor;  and  discountenance  the 
attitude  of  manufacturers  in  treating  labor  as  a  commodity. 

There  is  a  definite  challenge  and  a  great  opportunity  for 
service  by  the  trade  associations  of  the  country  in  fixing  indus- 
trial relations  for  the  next  ten  years.  Employees  must  be 
recognized  as  human  beings ;  must  be  allowed  to  express  their 
creative  instinct;  and  must  be  encouraged  to  realize  that  they 
are  part  of  the  industry  and,  moreover,  that  they  will  be 
recognized  and  paid  in  fair  proportion  to  the  service  which 
thev  render. 


122  TRADE   ASSOCIATIONS 

The  Association's  Attitude  Toward  Employees 

The  employer  would  resent  it  in  a  minute  if  he  were  not 
permitted  to  exercise  his  vision,  energy,  creative  ability,  and 
leadership.  Those  are  the  qualities  which  have  made  him 
exactly  what  he  is  as  the  head  of  his  company.  But  there  are 
likewise  in  the  ranks  of  his  employees  many  men  with  the 
same  fine  qualities  who,  in  the  interests  of  the  industry,  have 
the  same  right  within  reasonable  limits  to  express  themselves. 
The  old,  conservative  manufacturer  may  protest,  perhaps,  that 
this  is  a  socialistic  doctrine;  but  his  view  is  wrong — it  is 
absurd.  The  employee  must  not  be  made  to  feel  that  he  is 
merely  a  cog  in  the  machine,  but  that  he  is  part  of  a  team  that 
is  working  together  for  victory;  that  the  success  of  his  em- 
ployer is  his  own  success;  that  together,  by  co-operation  and 
understanding,  they  will  rise  and  gain  the  results  which  both 
desire.  This,  then,  is  the  opportunity  of  the  trade  association: 
to  cause  among  manufacturers  appreciation  of  the  tendencies 
of  the  times  and  a  willingness  to  comply  with  their  demands. 

Bureau  of  Industrial  Relations 

The  American  Iron  and  Steel  Institute  has  aroused  a 
recognition  of  this  necessary  appreciative  point  of  view  among 
its  members,  as  have  the  associations  in  other  large  employing 
industries.  The  method  followed  has  often  been  that  of  estab- 
lishing within  the  industry  various  industrial  relations  services 
which  act,  not  as  detective  agencies,  but  rather  as  means  of 
creating  a  better  understanding  between  employer  and  em- 
ployee. Their  object  is,  on  the  one  hand,  to  break  through  the 
hard  shell  of  the  employer,  and  on  the  other  hand,  to  educate 
the  employee  to  recognize  both  his  opportunities  and  the  com- 
mon problems  which  he  shares  with  his  fellow-workmen  and 
with  his  employer.  The  attitude  of  these  services  is  not  non- 
union; it  is  essentially  "open  shop,"  where  every  man  who 
works  conscientiously  is  given  a  square  deal. 


INDUSTRIAL   FUNCTIONS  123 

Bureau  of  the  United  Typothetae 

The  Bureau  of  Industrial  Relations  maintained  by  the 
United  Typothetae  of  America  may  serve  as  an  excellent 
example  of  these  services. 

The  general  purpose  of  this  bureau  is  to  provide  within 
the  printing  industry  centralized  investigation,  co-ordination, 
analysis,  interpretation,  and  distribution  of  information  on  the 
problem  of  industrial  relations  between  employer  and  em- 
ployee. Eventually  the  foundation  will  be  laid  for  the  formu- 
lation of  broad,  constructive  policies  which  will  bring  greater 
uniformity  in  wages  and  working  conditions  and  eliminate 
through  voluntary  conciliation  and  arbitration  those  industrial 
disturbances  which  seriously  handicap  the  productive  effort  of 
industry. 

The  bureau  renders  consulting  service  in  labor  adjustments 
as  the  need  or  demand  therefor  may  arise.  Its  policy  at  all 
times  is  non-disputative  and  its  work  is  conducted  under  the 
high  ideal  of  scientific  research  to  obtain  all  important  facts 
necessary  for  sound  and  correct  conclusions. 

It  is  making  an  exhaustive  study  of  the  cost  of  living, 
strikes,  labor  supply,  wage  negotiations,  wage  scales,  hours  of 
labor,  profit-sharing,  apprenticeship,  shop  committees,  indus- 
trial councils,  safety  and  sanitation,  contractual  relations  be- 
tween employers  and  employees,  and  other  factors  vital  to  the 
stable  and  satisfactory  relations  of  the  members  of  the  associa- 
tion. 

Local  Committees  and  Their  Functions 

The  bureau  encourages  the  formation  of  local  committees 
on  industrial  relations  among  its  members  in  different  cities 
throughout  the  United  States.  The  local  committees  can  of 
themselves  exercise  the  following  functions,  which,  as  has  been 
stated  before,  a  national  association  cannot  properly  per- 
form : 


124  TRADE   ASSOCIATIONS 

1.  Dealing  with  local  problems. 

2.  Conducting  wage  negotiations. 

3.  Securing  data  on  the  cost  of  living,  on  the  economic 

factors  of  industry,  and  on  all  other  factors  that 
may  affect  wage  negotiations. 

4.  Acting  in  case  of  strikes  and  controversies. 

5.  Adjusting  employment  problems. 

6.  Surveying  and  studying  apprenticeship  problems  and 

keeping  informed  on  working  conditions  and  local 
labor  policies,  such  as  the  relationship  between  closed 
and  open  shops. 
Some  local  committees  employ  a  regular  experienced 
secretary  or  manager  to  attend  to  these  local  labor  matters. 
With  his  and  the  committee's  activities  the  association  has 
nothing  to  do  as  it  must  be  sedulously  careful  to  keep  "hands 
off,"  but  the  association  may  act  as  a  means  of  sending  infor- 
mation without  comment  from  any  one  committee  to  local 
labor  committees  within  the  industry,  in  order  that  each  com- 
mittee may  be  cognizant  of  what  the  others  are  doing.  The 
point  should  be  emphasized  that  an  association  must  take  care 
not  to  allow  itself  to  become  an  anti-labor-union  organization. 
The  association  can  advocate  broad  principles  of  labor  policy 
and  industrial  welfare  but  the  individual  problems  of  local 
members  must  be  settled  by  those  members  themselves  in  and 
for  their  own  territory. 

The  Finished  Product 

The  classification  of  finished  product,  its  packing,  market- 
ing, and  shipping  are  all  industrial  functions  of  an  association. 

In  the  same  way  as  trade  associations  insist  on  a  standard- 
ization of  raw  materials  in  their  industry,  so  also  they  appre- 
ciate the  value  of  properly  classifying  their  own  finished  prod- 
uct. Many  associations  claim  the  honor  of  having  been  partly 
responsible  for  the  passage  of  pure  food  laws.     These  organ- 


INDUSTRIAL   FUNCTIONS  1^5 

izations  by  giving  extensive  publicity  to  the  abuses  of  adultera- 
tion have  undoubtedly  influenced  public  opinion  in  this  respect. 
Through  special  reports  and  through  other  direct  advice 
associations  are  now  teaching  their  members  how  best  to  label, 
fold,  arrange,  pack,  and  ship  their  products.  When  matters 
like  these  are  called  to  the  attention  of  an  entire  industry  by 
a  representative  association  more  efficient  factory  operation 
and  an  appreciable  decrease  in  cost  are  secured. 

Labels 

The  work  of  the  organized  canning  industry  in  this  respect 
is  worthy  of  notice.  Through  the  n^sdium  of  the  association, 
canners  had  gradually  come  to  realize  the  advantage  of  prop- 
erly branding  their  products.  As  misleading  names  and  labels 
reflect  upon  the  canning  industry  in  general,  it  behooved  the 
association  to  impress  upon  its  members  the  necessity  for  the 
careful  classification  of  all  goods. 

Canners  were  in  the  habit  of  using  fancy  and  fictitious 
names  for  such  canned  foods  as  corn,  beans,  peas,  etc. — as, 
for  example,  "Cornette"  with  a  picture  of  a  cornet  on  the 
label,  a  classification  that  conveyed  no  definite  idea  of  food 
value  to  the  purchaser.  Through  the  efforts  of  the  association 
these  foods  are  now  classified,  advertised,  and  labeled  for  what 
they  are.  This  practice  has  increased  the  sale  of  canned  stuffs ; 
for  now  the  customer  knows  what  he  is  getting  and  will  not 
entertain  suspicions  that  a  substitute  is  being  foisted  upon  him. 

The  tissue-paper  manufacturers  through  their  association 
have  adopted  a  regular  association  label,  illustrated  in  Form  2, 
which  guarantees  the  count  and  size  of  the  paper  in  the  pack- 
age. Previous  to  this  packages  were  sometimes  a  number  of 
sheets  short  or  not  of  the  exact  size  ordered.  Now  that  all 
customers  have  begun  to  realize  the  value  of  the  label  they 
insist  that  it  shall  always  appear  as  a  guaranty  on  all  packages 
that  the)'  purchase.    Various  grades  of  paper  are  marked  with 


126 


TRADE   ASSOCIATIONS 


labels  of  different  colors  so  that  they  are  readily  recognized  in 
the  stockroom.  The  name  of  the  member  does  not  appear  on 
the  label,  but  it  bears  a  cipher  number  known  only  to  the 
secretary  of  the  association.  The  label  gives  also,  of  course, 
the  name  of  the  association  and  the  name  and  address  of  the 


repp>  ^^5^^^^^5^-^^£y^^^^pz£»b^ 


SIZE  AND  COUNT 
PRINTED  HERE 


gt 


Form  2.     Association  Label.     (Size  4}ix2%.) 

secretary.  If  the  purchaser  finds  that  the  package  is  a  number 
of  sheets  short  or  does  not  come  up  to  full  specifications  and 
size,  he  merely  writes  to  the  association  and  gives  the  particular 
member-number  on  the  label.  The  secretary  can  then  imme- 
diately communicate  with  the  member  and  an  adjustment  is 
made. 


CHAPTER  X 
SERVICE  ACTIVITIES— INFORMATIVE 

What  Service  Is 

Apart  from  commercial  and  industrial  functions  there  are 
various  activities  carried  on  by  a  trade  association — services 
which  are  placed  at  the  disposal  of  its  members.  These  service 
activities  may  take  many  forms:  the  issuing  of  trade  journals 
for  disseminating  information,  the  maintenance  of  employ- 
ment bureaus,  and  educational  work  in  trade-schools  or  col- 
leges. 

The  Trade  Journal 

One  of  the  most  obvious  means  of  educating  members  in 
the  various  activities  of  an  association,  and  in  subjects  relating 
to  the  conduct  and  welfare  of  a  particular  industry,  is  through 
a  trade  journal. 

Besides  containing  accounts  of  convention  or  meeting  pro- 
ceedings these  periodicals  devote  much  space  to  the  discussion 
of  trade  methods,  new  ideas,  efficiency  systems,  new  processes, 
reports  of  investigations  or  of  experiments  with  new  kinds  of 
raw  materials — in  fact  to  all  the  important  factors  that  may 
not  be  brought  up  at  the  ordinary  meetings. 

A  trade  paper  is  really  a  weekly  or  monthly  trade  meeting 
brought  to  the  home  of  every  member  and  attended  at  his  con- 
venience. One  drawback,  of  course,  is  that  matters  of  a  per- 
sonal and  intimate  nature  cannot  be  discussed  in  its  columns. 
This  defect,  however,  is  obviated  by  the  private,  printed  letter 
of  the  secretary  w4iich  is  sent  to  the  members  each  month,  and 
the  details  of  which  are  suggested  in  Chapter  XV. 

127 


128  TRADE    ASSOCIATIONS 

Relation  of  the  Association  to  the  Trade  Journal 

The  trade  journal,  although  often  the  official  organ  of 
some  trade  association,  is  not  always  published  by  the  organ- 
ization. In  every  industry  there  are  generally  one  or  two 
commendable  trade  publications  which  discuss  in  a  general 
way  matters  of  considerable  interest  to  the  industry,  but  which 
are  not  in  any  way  connected  with  the  trade  association  of  the 
industry  or  its  activities,  i'hey  are  not  antagonistic  to  the 
association,  but  they  are  entirely  private  ventures.  Their  prin- 
cipal object,  of  course,  is  to  secure  advertising  from  a  specific 
group  of  business  men,  and  the  matter  which  appears  in  their 
columns  is  chosen  merely  for  its  general  interest  to  the  trade. 

But  when  a  trade  journal  is  published  by  a  trade  association 
it  is  almost  always  used  as  an  aid  primarily  in  furthering 
association  activities.  Such  papers  do  not  attempt  to  cater  to 
the  views  of  opposing  interests  merely  to  secure  their  adver- 
tising. One  particular  association  that  produces  a  good  trade 
magazine  censors  its  advertising  very  strictly  for  reliability  in 
the  same  way  as  do  some  of  the  leading  newspapers  in  the 
country.  The  question  as  to  whether  or  not  an  association 
should  publish  its  own  journal  is  one  open  to  a  great  deal  of 
discussion.  Those  who  have  not  tried  it  always  think  that 
some  day  they  may  do  so,  but  those  who  have  tried  it  are  apt 
to  advise  against  it.  This  at  least  may  be  said:  When  a  trade 
association  undertakes  a  publication  of  any  considerable  size, 
for  instance,  a  monthly  magazine,  it  may  expect  innumerable 
difficulties. 

The  ideal  arrangement  in  an  industry  is  to  have  one  or  two 
good  publications  issued  independently  by  private  parties,  and 
then  for  the  association  to  have  its  own  regular  bulletin,  of 
whatever  size  may  be  convenient,  but  issued  as  a  matter  of  in- 
timate information  to  the  members  each  month  and  in  no  way 
dependent  on  subscriptions  or  advertising. 

Some  associations  which  have  members  dealing  in  a  variety 


SERVICE   ACTIVITIES — INFORMATIVE  129 

of  products  have  a  system  of  exchange  advertising  in  their 
bulletins ;  that  is,  so  much  space  is  set  aside  for  the  members 
any  one  of  v^hom  may  insert  a  limited-sized  advertisement  of 
his  product  which  may  be  of  interest  to  other  members  of  the 
association. 

Bulletins 

The  bulletins  issued  by  an  association,  both  regular  and 
special,  may  be  made  extremely  valuable.  The  regular  bulletin, 
issued  monthly  perhaps  from  four  to  eight  pages,  often 
resembles  a  house  organ  except  that  it  should  contain  no 
personal  references.  The  shorter  and  less  discursive  the  bul- 
letin the  better.  It  should  present  notes  regarding  market 
conditions  and  trends,  raw  material  supplies,  credits,  sales,  and 
similar  matters  of  general  interest. 

Special  Bulletins 

Separate  publications  in  the  form  of  circulars,  leaflets, 
pamphlets,  and  even  books  may  be  prepared  from  time  to  time 
and  sent  to  the  members  or  the  public  to  meet  some  specific 
need.  Some  of  these  may  consist  of  classifications  of  product, 
with  technical  tables,  commodity  values,  cost  statistics,  export 
and  import  facts  and  supply  and  demand  figures.  Others 
may  deal  only  with  some  one  subject,  such  as  information  on 
dyes,  on  carding  wool,  or  on  some  chemical  process. 

In  this  way  the  opinion  of  the  association  or  of  the  public 
is  swayed  or  is  educated,  and  greater  breadth  of  view  is 
effected.  An  increased  demand  for  the  product  of  an  industry 
has  often  resulted  from  publicity  of  this  type. 

Trade-Mark   Bureau 

The  importance  of  the  matter  of  labels  and  trade-names 
has  led  to  the  development  in  a  number  of  associations  of 
trade-mark  bureaus.     The  movement  is  likely  to  grow.     As- 


130  TRADE   ASSOCIATIONS 

sociations  are  realizing  more  clearly  the  necessity  of  protecting 
their  trade-marks  or  trade-names  and  also  that  time,  money, 
and  annoyance  can  be  saved  by  avoiding  conflicting  names. 

The  Toilet  Paper  Converters  Association  have  a  trade- 
mark registration  bureau  which  has  proved  satisfactory  to  the 
members.  As  may  easily  be  appreciated,  there  are  thousands 
of  various  names  used  for  toilet-paper  and  the  producers  are 
frequently  changing  the  names  or  adopting  new  ones  to  win 
the  attention  of  purchasers.  The  result  has  been  continual 
conflict  because  of  the  similarity  in  names  or  in  design. 

It  must  be  borne  in  mind  that  while  a  trade-mark  or  design 
can  be  registered  at  the  Patent  Office  in  Washington,  a  trade 
form  or  device,  as  such,  cannot  be  registered.  Questions, 
therefore,  are  continually  arising  in  regard  to  the  use  of 
various  names  and  devices  concerning  which  no  information 
can  be  procured  from  the  Patent  Office. 

To  meet  this  difficulty  the  producers  of  toilet-paper  have 
reported  to  their  bureau  the  names  or  labels  of  all  the  various 
kinds  of  toilet-paper  which  they  produce;  they  state  the  ap- 
proximate date  when  every  such  name  was  first  used,  and 
whether  it  has  been  registered  in  the  United  States  Patent 
Office.  These  names  are  then  listen  on  cards  in  some  such 
way  as  given  in  Form  3 . 

At  the  time  of  registry  the  members  file  with  the  bureau 
copies  of  all  the  actual  labels  which  they  use.  These  labels  are 
then  pasted  in  large  scrapbooks,  with  page  numbers,  for 
ready  reference  on  the  card  above.  When  conflicts  arise, 
priority  of  use  as  established  by  these  cards  determines  the  use 
of  the  label.  It  might  seem  that  many  difficulties  and  much 
unpleasantness  might  arise  from  such  conflicts,  but  this  has 
not  been  the  case;  adjustments  are  readily  made  and  priority 
claims  conceded.  If,  however,  a  man  has  not  used  a  name  or 
label  for  a  number  of  years,  a  sort  of  statute  of  limitations 
operates  against  him  and  he  is  expected  to  waive  his  claim. 


SERVICE   ACTIVITIES — INFORMATIVE  ^3^ 


MANUFACTURERS  ASSOCIATION 
St.,  New  York 


Label  Registration 

To  be  filled  in  by 
Association  only. 

1.  Name  of  Brand , Book 

Page 

2.  Used  by When  first  used 

3.  Is  brand  registered  in  U.  S.  Patent  Office? 

If  so,  number  of  registration Date  of  registration 

4.  Is   brand   copyrighted  ? 

If  so,  when  ? 

5.  Is  exclusive  ownership  claimed?     Yes No 


6.  Claim   examined   and  filed 

7.  Remarks  

Note:    Do  not  fill  in  6  or  7. 


Form  3.     (a)  Label  Registration  Card  (face).     (Size  5x3.) 


Rules 

1.  Members  shall  notify  Secretary  of  names  selected. 

2.  Brands  so  approved  to  be  for  members'  exclusive  use. 

3.  Brand  claimed  for  any  line  shall  apply  to  all  lines. 

4.  Validity  of   claim   shall  be   decided  by   Secretary  by   priority  of 

record  entry. 

5.  Conflicting  brands  to  be  decided  by  mutual  agreement  between 

interested  members,  or  by  arbitration. 

Pre-emption  applies  to  names,  not  common  trade  terms. 
Variation  in  spelling  does  not  constitute  proper  claim. 
Letters  or  syllables  prefixed  or  suffixed  to  title  already  in  use,  not 
a  valid  claim. 


Form  3.     (b)  Label  Registration  Card  (reverse) 


132  TRADE   ASSOCIATIONS 


LABEL  REGISTRATION  BUREAU 

St.,  New  York 

To  All  Concerned: 

of 

have    applied    to    this    bureau    for    the    registration    of    the    brand 
name 

Unless  within  30  days  of  this  date  this  name  is  protested  or 
claimed  by  evidence  to  have  been  previously  or  presently  used  it 
will  be  registered  in  favor  of  this  company. 

(Name  of  Association) 

Per (Name  of  Secretary) 

Date : 


Form  4.     (a)   Notice  of  Application  for  Registration  of  Brand. 
(Size  6x9.) 


LABEL   REGISTRATION   BUREAU 

St.,  New  York 

To  All  Concerned: 

This  is  to  certify  that  on  the  date  named  below,  appUcation 
for  registration  of  a  label  having  been  made  thirty  days  previous 
at  this  bureau  by 

of 

the  name  of  said  brand  being ; 

that  since  said  brand  never  having  before  been  registered  by  this 
bureau,  nor,  after  due  notice,  protested  or  claimed  by  evidence 
to  have  been  previously  or  presently  used  by  any  other  company, 
therefore,  we  have  registered  the  above  name  for  the  exclusive 
use  of  the  above  company. 

(Name  of  Registration  Bureau) 

Per (Name  of  Secretary) 

Date : 

Form  4.     (b)  Notice  of  Registration  of  Brand.     (Size  6x9.) 


SERVICE    ACTIVITIES — INFORMATIVE  133 

When  a  member  wishes  to  use  a  new  name  he  communi- 
cates with  the  bureau  to  learn  whether  or  not  the  name  is  in 
use.  This  name  of  the  brand  which  the  appHcant  wishes  to 
render  is  filled  in  on  Form  4a. 

If  within  30  days  from  the  date  of  notification  no  protest 
or  claim  is  made,  then  Form  4b  is  mailed  to  all  members  and 
the  name  is  formally  added  to  the  registration  cards  to  the 
credit  of  the  applicant. 

No  objection  having  been  filed  or  priority  claim  made 
after  thirty  days,  the  name  is  then  entered  in  the  trade-mark 
registration  bureau  as  used  by  the  applicant  and  it  becomes  his 
property  by  prior  right. 

International  Trade-Mark 

In  the  case  of  an  industry  in  which  goods  are  shipped 
abroad,  considerable  attention  should  be  given  to  international 
trade-mark  laws.  Not  long  ago  a  German  registered  a  large 
number  of  trade-mark  names  of  United  States  products  in 
European  countries.  Under  the  present  international  trade- 
mark laws,  once  the  names  had  been  so  registered  none  of  these 
goods  could  be  shipped  into  those  countries  without  the  per- 
mission of  the  man  who  had  registered  them.  His  scheme, 
of  course,  was  to  have  the  United  States  manufacturers  buy 
off  his  trade-mark  claims. 

If  an  industry  is  exporting  trade-mark  articles  abroad, 
whether  or  not  it  maintains  a  trade-mark  bureau,  the  associa- 
tion that  represents  it  should  employ  an  able  trade-mark  law- 
yer to  find  out  if  all  the  trade-names  used  by  the  members  are 
in  order  and  properly  protected  not  only  in  this  country  but 
in  the  foreign  countries  to  which  shipments  are  made. 

The  Patent  Office  Record 

A  trade-mark  bureau  should  also  keep  in  close  touch  with 
the  publications  of  the  United  States  Patent  Office  so  as  to  be 


134  TRADE   ASSOCIATIONS 

sure  that  no  names  have  been  registered  there  of  which  the 
bureau  has  no  record.  The  bureau  itself  should  publish  from 
time  to  time  an  up-to-date  list  of  all  trade-marks  registered  by 
it,  and  should  call  especial  attention  to  those  newly  adopted. 

It  will  readily  be  appreciated  that  such  a  bureau  as  this  will 
save  the  members  a  great  deal  of  money.  In  the  absence  of 
such  a  bureau,  members  have  had  plates  made  for  a  certain 
new  design,  the  printing  done,  and  the  goods  placed  on  the 
market  before  discovering  that  the  name  selected  was  being 
used  by  someone  else.  The  complications  and  losses  resulting 
therefrom  are  obvious. 

Traffic  Bureaus 

In  connection  with  shipping,  which  involves  problems  of 
packing  and  routing  shipments,  tracing  shipments,  adjusting 
losses  and  damages,  and  classifying  rates,  traffic  bureaus  have 
been  developed  in  a  number  of  associations. 

The  services  of  the  traffic  department  of  a  national  associa- 
tion are,  of  course,  limited  by  the  necessity  of  avoiding  discrim- 
ination among  members  located  in  different  regions.  For 
instance,  one  could  readily  appreciate  the  difficulties  of  a  traffic 
manager  for  a  national  industry  which  has  members  west  of 
the  Mississippi,  in  the  Middle  West,  in  the  South,  and  in  New 
England,  in  endeavoring  to  advocate  a  schedule  and  adjust- 
ment of  freight  rates  which  would  be  satisfactory  to  all  of  the 
members  in  their  various  markets.  An  association  that  repre- 
sents producers  of  foodstuffs  not  long  ago  endeavored  to  have 
certain  freight  rates  adjusted,  with  the  result  that  the  pro- 
ducers in  the  East  got  much  better  rates  than  those  in  the 
West.  The  western  members  consequently  felt  that  they  had 
not  received  the  benefits  desired.  The  mistake  which  this 
association  made  was  in  attempting  to  do  the  impossible. 
When  the  members  of  an  association  are  located  in  various 
parts  of  the  United  States  it  is  practically  impossible  for  the 


SERVICE   ACTIVITIES— INFORMATIVE  135 

association  to  bring  about  a  schedule  of  freight  rates  which 
will  be  satisfactory  to  them  all. 

This  should  not,  however,  lead  one  to  believe  that 
the  traffic  manager  cannot  be  active  in  representing  the  in- 
terests of  various  territories  in  the  endeavors  of  these  terri- 
tories to  obtain  reasonable  freight  rates.  He  must  not  devote 
too  much  attention,  however,  to  any  one  territory  or  in  any 
way  have  it  appear  that  he  is  endeavoring  to  get  something  for 
one  territory  which  would  be  to  the  disadvantage  of  members 
elsewhere.  In  matters  of  general  interest  to  the  association  he 
can  be  a  most  useful  representative  before  the  Interstate  Com- 
merce Commission  and  other  freight-rate  adjusting  boards,  and 
can  keep  the  members  thoroughly  informed. 

He  can  also  act  as  a  general  adviser  to  inquiring  members 
on  routines,  rates,  and  such  information,  or  as  a  particular 
adviser  to  the  traffic  manager  of  some  one  member.  More- 
over, w^hen  members  do  not  have  their  own  traffic  managers 
they  can  refer  claims  and  other  freight  disputes  to  the  associa- 
tion traffic  manager  for  adjustment.  The  department  should 
be  entrusted  only  to  a  man  who  understands  freight  business, 
as  no  one  else  can  so  successfully  develop  its  services  to  a  high 
degree  of  usefulness. 

Employment  Bureaus 

Another  valuable  service  which  a  number  of  associations 
render  their  members  is  that  of  keeping  a  record  of  available 
employees.  When  such  a  record  is  kept,  a  man  who  applies  for 
a  position  is  asked  to  fill  out  a  form  and  to  obtain  a  guaranty 
of  desirability  from  a  former  employer.  Later  on,  members 
of  the  association  can  write  to  the  secretary  and  ask  if  he  has 
available  on  his  list  certain  kinds  of  employees.  In  reply  to 
such  an  inquiry  the  secretary  can  possibly  send  back  to  the 
manufacturer  a  list  of  a  half-dozen  available  men  with  their 
complete  records  and  wath  recommendations  for  each  of  them. 


136  TRADE   ASSOCIATIONS 

Thus  a  member  has  all  the  facts  in  regard  to  any  possible 
employee,  and  if  satisfied  with  the  applicant,  can  write  directly 
to  him  and  make  whatever  arrangements  are  desired.  In  this 
way  the  association  is  not  held  responsible  if  an  employee 
proves  unsatisfactory  but  serves  merely  as  a  means  of  putting 
a  manufacturer  and  a  possible  employee  in  touch  with  each 
other. 

There  is  one  danger,  however,  in  connection  with  a  labor 
bureau  of  registration,  namely,  that  of  building  up  a  black  list. 
Although  within  legal  limits  manufacturers  should  be  pro- 
tected against  undesirable  employees,  the  force  of  the  labor 
bureau  should  never  be  used  in  a  prejudicial  way  to  keep 
worthy  and  deserving  men  from  procuring  employment. 

Credits  and  Collections 

A  most  useful  form  of  association  service  relates  to  col- 
lections. A  number  of  associations  maintain  their  own  credit 
bureaus;  some  of  them  even  operating  a  rather  elaborate 
system. 

One  of  the  simplest  ways  of  reporting  credit  information 
is  for  each  member  to  send  the  secretary,  monthly,  a  list  of 
certain  debtors  about  whom  he  feels  the  other  members  should 
have  information.  The  system  of  reporting  such  creditors 
may  be  based  upon  an  alphabetical  index,  "A"  meaning  fair, 
"B"  slow,  and  "C"  questionable.  This  information  may  then 
be  imparted  to  inquiring  members. 

If  an  association  is  to  maintain  a  credit  bureau,  it  will  have 
to  be  carefully  conducted  along  proper  lines.  In  the  lower 
court  in  the  Eastern  States  Retail  Lumber  Dealers  Association 
case,  Judge  Lacombe,  writing  the  opinion  said : 

No  doubt  every  dealer  has  a  right  to  choose  from  whom 
he  will  buy.  He  has  a  right  to  impart  to  anyone  else  any 
information  he  may  have  about  the  business  methods  of  any- 
one, even  though  the  natural  result  of  thus  telling  what  he 


SERVICE    ACTIVITIES — INFORMATIVE  137 

knows  may  induce  the  person  whom  he  tells  to  cease  business 
relations  with  the  other  person. 

He  then  asked: 

May  the  several  retail  dealers  combine  into  an  association 
in  order  the  better  to  acquire  and  distribute  knowledge  about 
the  business  methods  of  others,  by  means  of  the  circulation 
among  themselves  of  reports  such  as  these? 

And  he  answered  these  questions  by  saying: 

It  seems  to  us  that  they  cannot  do  so  without  violating 
the  Sherman  Act.  It  is  now  well  settled  that  the  words 
"restraint  in  trade"  in  that  Act  are  to  be  constructed  as  includ- 
ing "restraint  of  competition."  Full,  free,  and  untrammeled 
competition  in  all  branches  of  interstate  commerce  is  the 
desideratum  to  be  secured. 

An  association  credit  bureau  must  be  operated  along  these 
lines,  i.e.,  the  members  may  make  to  the  information  depart- 
ment accurate  reports  of  unsatisfactory  transactions,  giving 
the  name  of  the  party  and  the  circumstances  of  the  case.  This 
information  may  be  preserved  on  record  and  disclosed  to  any 
other  member  of  the  association  who  may  make  inquiry  con- 
cerning the  party  with  whom  such  unsatisfactory  transaction 
has  been  had,  but  the  custodian  of  these  records  may  not  and 
must  not  broadside  the  association  membership  with  such 
information;  in  other  words,  the  information  must  not  be 
given  out  to  anyone  except  those  who  may  ask  for  it. 

A  "Black  List"  Decision 

A  common  form  of  conveying  a  collection  threat  is  one 
which  explains  that  as  a  member  of  a  trade  or  a  credit  associa- 
tion the  creditor  is  required  to  report  all  slow  and  delinquent 
accounts  in  order  that  other  members  of  the  association  may 
not  suffer  loss  through  credit  granted  to  the  same  habitual 
delinquent.     Because  the  debtor  realizes  that  his  account  has 


138  TRADE   ASSOCIATIONS 

been  neglected  without  any  reasonable  excuse,  he  is  usually 
quick  to  see  the  disadvantage  of  having  his  name  listed  among 
slow-pay  customers.  This  is  particularly  true  since  he  does  not 
know  how  wide  a  circulation  such  a  list  may  have. 

There  has  been,  however,  some  doubt  as  to  the  legality  of 
such  a  proceeding.  An  important  decision  has  been  rendered 
in  Florida  covering  this  point.  As  the  case  was  not  based  on 
any  statute  peculiar  to  Florida  but  on  the  common  law,  it  is 
very  likely  that,  should  a  case  come  up,  the  decision  will  be 
followed  in  other  jurisdictions. 

Two  important  points  were  made  in  the  decision: 

1.  It  is  legal  for  an  association  of  merchants  to  make  an 

agreement  not  to  extend  additional  credit  to  a  sub- 
scriber who  owes  any  one  of  those  merchants. 

2.  It  is  legal  to  notify  a  customer  that  if  he  does  not  pay 

his  name  will  be  given  to  the  association  as  a  de- 
linquent debtor. 

The  title  of  the  case  is  Putnam  v.  Inman.  It  appears  that 
the  customer  had  been  repeatedly  dunned  by  his  creditor, 
whose  last  letter  stated  "that  he  was  under  obligation  to  report 
to  the  association  the  name  of  any  person  who  does  not  pay  his 
or  her  bills  promptly,"  and  that  he  "would  dislike  very  much 
to  turn  your  name  over  to  the  association  as  it  would  probably 
affect  your  credit  in  the  town  of  .  .  ."  The  customer 
refused  to  pay  the  bill  on  the  ground  that  he  did  not  owe  it. 
After  failing  to  collect  the  bill  the  merchant  listed  the  cus- 
tomer's name  with  the  association.  It  was  communicated  to 
the  other  members  on  inquiry  as  the  name  of  a  delinquent 
debtor  and  his  credit  was  cut  off.  The  customer  then  entered 
suit  for  libel  claiming  that  listing  him  as  bad  pay  was  unwar- 
ranted assault  upon  his  reputation. 

The  case  was  tried  before  a  jury,  which  rendered  a  verdict 
for  the  debtor.     It  was  then  appealed  to  the  Supreme  Court 


SERVICE   ACTIVITIES — INFORMATIVE  139 

of  the  state  of  Florida,  which  reversed  the  lower  court.  The 
Supreme  Court  held  that  "merchants  had  the  right  to  organize 
for  their  own  protection  and  to  enter  into  mutual  agreements 
for  the  purpose  of  giving  each  other  the  benefit  of  their 
knowledge  about  those  in  the  community  who  meet  their 
obligations  promptly  and  those  who  do  not ;  and  a  communica- 
tion on  the  subject,  made  by  a  member  of  the  association  to 
the  other  members,  is  privileged,  if  made  in  good  faith  and  in 
such  a  manner  and  on  such  an  occasion  as  to  properly  serve 
the  purpose  of  the  association.  It  is  privileged  and  not  libel- 
ous, even  if  not  true,  if  the  merchant  acted  honestly  and  in 
good  faith  throughout." 

It  would  seem  that  a  warning  of  such  action  is  necessary 
although  the  court  does  not  appear  to  have  touched  upon  that 
point. 

Reports  from  Bureau 

Naturally  a  creditor  will  ascertain  from  Bradstreet's  or 
Dun's  the  status  of  his  debtors;  but  if  this  does  not  give  the 
information  as  desired,  such  a  method  as  is  indicated  in  Forms 
5,  6,  and  7,  can  be  used. 

If  a  member  has  no  names  to  report  he  should  make  a 
definite  statement  to  that  effect  in  order  that  the  secretary 
may  be  sure  that  this  member  is  not  overlooking  his  contribu- 
tion to  the  reciprocal  service. 

AH  of  the  doubtful  customers  of  the  members  are  listed  on 
a  system  of  cards.  Immediate  credit  information  can  be 
given  in  most  cases  by  telephone.  If  particular  information 
is  desired,  it  has  to  be  sent  by  mail,  which  takes  more  time. 

Unquestionably  the  best  plan  for  an  association  that  wishes 
to  establish  a  credit  bureau  is  to  go  to  the  National  Association 
of  Credit  Men  or  some  similar  body  and  engage  a  man  who  is 
conversant  with  handling  credits,  and  who  can  establish  a 
regular  credit  bureau  on  the  usual  lines  of  credit  activity. 


140 


TRADE   ASSOCIATIONS 


INQUIRY  RETURN  TO 

BLANK  CREDIT  DEP.^RTMETiT 

THE  MOTOR  AND  ACCESSORY   MANUFACTURERS  ASSOCIATION 
Whether  You  Report  Experience*  or  Not 
Name 
AncwCT  All  Questioiu 
Carefully  and  FuDy  AHdre^  


(Over) 


SALES  DURING  MARCa  1920  $- 
TERMS  ON  ABOVE  SALES 


INDICATE  BELOW  HOW 
PAYMENTS  WERE  MADE  DURING  MARCH,  1920 

Answer  by  one  check  mark   only;    il  more  than  ODe  paymenl  was  made,   indi( 


Ihe 


■cr^gc. 


CondiHoo  of  Indebtedai 
April  lal.    1920 


lover  5  days  past  due  -^— 
Trade  Acceptances,    Not  Du 

Past  Due   Accounts 

In  Dispute 


Notes  Ouistandins 
COD.       "      - 


Have  you  granted  extra  time  or  extension  on  this  account  during  past  30  days?      Amount - 
Have  you  had  occasion  to  restrict  credit  in  this  period  and  how?  ■-■■  —  ■- 

H»Te  you  security  or  guarantee  on  this  account? 

WhoK • 

NOTE:— This  {ona  tkMiU  be  lilled  and  retarnad  wittin  six  cUys. 


MEMBER'S  NUMBER 


(Over) 


Form  5.     (a)  Association  Credit  Report — Inquiry  Blank  (face). 
(Size  8x53/^.) 


REMARKS 

In  addition  to  actual  figures,  other  information  is  exceedingly  valuable  in  dcte-mining  credit  responsibil; 
Information,  favorable  or  otherwise,  rcgardinj;  tlie  personnel  o(  the  concern,  its  method  of  doing  busi 
at  relates  to  apparent  proiperity,  efficiency  (or  the  rti-erse),  etc  ,  will  be  appreciated. 

USE  THIS  SPACE  FREELY 


the  appearance   of  iu 


Form  5.     (b)  Association  Credit  Report — Inquiry  Blank  (reverse) 


Uniform  Contracts 

While  we  are  considering  this  subject  of  credit  the  question 
as  to  the  possibiUty  of  a  uniform  contract  may  be  raised.  An 
agreement  among  competitors  to  adopt  and  adhere  to  a  stand- 
ard form  of  contract  imposes  a  restriction  upon  the  freedom 
of  action  of  the  members  of  the  association  which  is  an  undue 


SERVICE    ACTIVITIES — INFORMATIVE 


141 


INFORMATION  REQUEST 

TO 

CREDIT  DEPARTMENT 

Motor  and  AcceMory  Manufacturers  Auociation 

PleAse  furnish  ui.  for  Credit  purposes,  inf  :>rmation  regarclinf  ^ 


Member'f  No. 


Dale. 


Gly 

I  Street  No. 
I  Suie 


Manufacturere  of 


Jobbers?- - Dealen? 


Our  experience  with  this  firm  is  at  foUowt:      Sold  How  Long> 
Highal  Oedil?  $ Owiog  Now  $ 


PeymjPracliM:  Discomits WV.en  Due DaysSlow 

Have  instructed  ui  to  hold  orders  amounting  to  $.-— 


-Pan  Due  $ 

— Tride  Acceptjao 
Their  ReoMO?  ~ 


-Dijri- 


FURTHER  INFOKKATION 


Form  6.     Association  Credit  Report — Request  for  Information  from 
Members.     (Size  8x6.) 


U«e  dieck  marki  for  antMcn. 
Um  space  at  right  when 
ans>renDg  *  qucstioni. 

DiscouDts 

Payi  When  Due 
Slow Day. 

Notes  Offered 

Note*  Accepted 

Notes  Eodoned  ( By  V.-'Kom  fit  Aal- ) 

Notes  ReDe\/cd 

Notes  Protested 

Trade  Acceptance 

Placed  with  Attorney 

Entered  Suil  (Date  and  Amounl) 

S.   D.  B/U  I  PrompiorSlow  ^ 

C.  O.  D.         \       inlif(b8? 

Accourl  GuironlKd 

By  Who=i? 

Amount)      $ 

Extension  As'.cd  * 

Eilcnsioa  Cnnlrd  * 

Credit  Curtailed  (Why?)  * 

Credit  Susp^aded   (Why?)        * 

Shipments  WilhhfJJ   (UTiy?)   * 

Take*  Unearned  Dijconnl         * 

Makes  Unjust  Claim*  ' 

Returns  Goods  Unjustly  * 

Changes  in  Offidali 

Loans  Negotiated 

Fire  Uss 

Covemment  Work 

Management   (Good.  Fair.  Poor) 

Condition  of  Invsntory 

Condition  of  plant 

Banks  Willi 


MEMBER'S  INFORMATION  BLANK 

Oate - Member  No._ 

SUBMITS  TO 

CREDIT  DEPARTMENT 


The  Motor  and  Accessory  Manufacturers  Association 

laf  ormAtton  od 

Address 


ta*ert   here   exptanacios*  of   ails' 
regardiDg  the  ^>ove  luxae 


•t  ieft  and  funush  aD  olbci  mfonutioo  powblt 


Um  ipaca  oa  other  ixje.  if  above  it  oot  wfSd 


Form  7.     Association  Credit  Report — Member's  Information  Blank. 
(Size83/^x6K-) 


142  TRADE    ASSOCIATIONS 

and  unreasonable  restriction  and  comes  within  the  condemna- 
tion of  the  law.  There  can  be  no  objection  when  an  association 
advocates  that  its  members  adopt  and  incorporate  into  their 
contracts  trade  customs  established  by  the  association.  The 
adoption  of  such  trade  customs  must  and  of  necessity  will,  to 
a  considerable  extent,  operate  towards  a  standardization  of  a 
form  of  contract,  but  the  right  of  all  members  of  the  associa- 
tion to  contract  in  such  fashion  as  each  may  see  fit  should  be 
unrestricted. 

Trade-Schools 

One  of  the  very  important  services  which  an  association 
can  render  to  the  industry  at  large  is  education.  One  of  the 
forms  such  education  takes  is  the  trade-school. 

In  some  associations  the  superintendents  of  mills,  the 
technical  men,  or  the  employees  themselves,  are  assembled  in 
small  groups  for  the  purpose  of  studying  principles  and 
methods  of  manufacture  by  means  of  the  trade-school.  Lec- 
tures are  given  to  these  men  at  frequent  intervals  by  those  who 
are  well  versed  in  the  particular  topics  assigned  to  them.  The 
demonstrations  which  are  given  at  these  group  meetings  are 
of  practical  value.  Manufacturing  processes  and  methods  of 
operation  are  carefully  explained  with  actual  materials,  tools, 
and  products. 

Example  of  the  Carriage  Builders  Association 

This  work  is  found  in  a  highly  organized  form  in  the 
trade-school  maintained  by  the  Carriage  Builders  National 
Association.  The  three  departments  of  this  school :  day, 
evening,  and  correspondence,  offer  to  men  who  wish  to  learn 
the  trade  an  excellent  opportunity  to  train  themselves,  for  the 
association  realizes  the  value  of  having  its  members  thoroughly 
conversant  with  the  best  methods  in  the  industry.  All  instruc- 
tion in  the  day  and  evening  classes  is  absolutely  free.     In 


SERVICE   ACTIVITIES — INFORMATIVE  143 

addition,  a  thorough  course  in  which  the  students  draw  up  a 
complete  series  of  small  and  full-sized  plans  is  given,  and 
visits  are  made  to  some  of  the  leading  wagon  factories  where 
detailed  explanations  of  processes  are  made. 

The  schools  of  the  United  Typothetae  of  America  described 
later  in  this  book  are  another  splendid  example  of  this  kind 
of  service. 

Recognizing  the  fact  that  the  introduction  of  new  factory 
processes  and  the  improvement  of  the  product  depend  upon  the 
training  of  the  men  in  their  industries,  the  Carriage  Builders 
National  Association  a  few  years  ago  delegated  a  party  to 
study  foreign  methods  of  technical  training  in  the  vehicle  field. 
The  resulting  report  contained  detailed  accounts  of  the 
methods  used  in  the  vehicle  drafting  schools  of  England, 
Germany,  France,  and  Austria. 

College   Courses 

In  several  of  the  universities  in  this  country  courses  are 
given  under  the  patronage  of  trade  associations.  The  paper 
industry  encourages  the  technical  study  of  paper-making  at 
the  University  of  Maine  and  elsewhere  through  its  Vocational 
Education  Committee,  whereas  other  associations  have 
arrangements  with  various  technical  schools  for  the  training 
of  scientific  men  for  their  particular  industry.  These  men  do 
not  come  into  the  industry  as  mill  operatives,  but  more  as 
technical  men  for  the  direction  of  particular  research  or 
production  work  in  some  company. 

Special  Educational  Agencies 

Members  often  need  as  much  educating  as  the  public, 
therefore  an  association  may  well  make  arrangements  to  have 
the  various  factors  in  production  and  distribution  in  an  indus- 
try brought  together.  This  is  best  effected  by  joint  committee 
meeting's. 


144  TRADE   ASSOCIATIONS 

The  mill  superintendents'  association  or  branch  of  an  in- 
dustry should  keep  in  touch  with  the  technical  or  the  purchas- 
ing agents'  associations  so  that  common  or  relevant  problems 
may  be  fully  understood  and  appreciated;  and  the  sales- 
men's association  should  be  familiar  with  the  work  or 
difficulties  of  the  above-mentioned  organizations.  In  a  word, 
as  it  is  obviously  beneficial  for  individuals  in  a  company  to 
understand  problems  which  are  common  to  them  all  or  which 
afifect  the  interests  of  the  company  as  a  whole,  in  like  manner 
wise  associations  or  branches  of  an  industry  may  follow  the 
same  policy  and  receive  the  same  results. 


CHAPTER  XI 

SERVICE  ACTIVITIES— PROTECTIVE 

Scope  of  Protective  Activities 

Additional  association  activities  under  the  head  of  "ser- 
vice" have  to  do  with  protection,  insurance,  arbitration,  and 
bringing  about  conditions  which  mean  more  and  better  business. 

Protection  Against  Solicitation 

The  first  of  these  association  activities  is  the  protection  of 
association  members  against  fraudulent  solicitations. 

An  executive  will  be  approached  by  some  solicitor  who 
will  state  that  the  competitors  of  the  particular  company,  on 
being  favored  with  a  call,  have  contributed  largely  for  some 
particular  purpose.  The  solicitor  will  even  show  a  book  or  a 
list  of  names  of  other  companies,  names  which  sometimes  may 
simply  be  forged.  Nine  times  in  ten  the  proposition  is  one  in 
which  the  executive  has  no  interest  whatever  and  to  which  no 
one  of  his  competitors  has  actually  contributed.  It  is,  in  fact, 
simply  a  "hold  up"  game. 

If  the  company  belongs  to  an  association  with  this  service 
the  executive's  task  is  easy.  He  has  merely  to  request 
time  for  consideration  of  the  solicitor's  request  and  then  to 
notify  the  association,  which  can  investigate  for  him  the  pur- 
poses and  standing  of  the  solicitor  or  the  product  that  he  or 
she  represents.  There  are  bureaus,  such  as  Proudfoot's  Com- 
mercial Agency,  which  for  a  fixed  sum  will  report  to  an  asso- 
ciation, upon  inquiry,  the  standing  of  an  organization  that 
may  be  seeking  funds.  Thus  the  members  of  the  association 
are  protected  against  fraudulent  solicitations  and  save  them- 
selves a  good  many  thousands  of  dollars  each  year. 

145 


146  TRADE*  ASSOCIATIONS 

Watching  Legislation 

It  is  not  only  desirable  but  sometimes  necessary  that  a  trade 
association,  as  representing  an  industry,  shall  protect  that 
industry  from  inimical  legislation.  This  does  not  mean  that 
the  association  should  become  a  lobbying  political  body.  Lob- 
bying, when  it  has  been  indulged  in,  has  always  served  to 
enervate  the  real  business  activities  of  an  organization  and 
often  has  brought  dissension  and  discord  among  the  member- 
ship without  accomplishing  any  real  good.  But  as  our  state 
and  national  lawmakers  sometimes  introduce  bills  without 
being  fully  informed  as  to  their  effect  on  all  branches  of  a 
particular  industry  or  line  of  business,  such  legislation  must  at 
all  times  be  watched  and  by  fair  and  reasonable  means  cor- 
rected through  enlightening  the  legislators. 

The  Tariff 

Another  activity  under  association  legislative  functions  is 
that  of  keeping  in  touch  with  the  tariff.  So  long  as  we  have 
a  tariff  every  association  that  represents  producers  has  the 
duty  of  watching  tariff  legislation  to  see  that  the  interests  of 
the  industry  concerned  are  properly  considered.  This  matter 
requires  careful  and  statesman-like  handling.  In  the  old  days, 
zeal  was  sometimes  carried  too  far  by  producers  and  the 
selfish  interests  of  various  lines  were  asserted  too  strongly. 
Today,  especially  since  the  World  War,  when  we  have  so  great 
need  of  developing  our  foreign  trade,  every  association  should 
bear  in  mind  that  the  tariff  situation  has  changed.  On  the 
other  hand  our  producers  cannot  be  expected  to  place  them- 
selves at  the  mercy  of  destructive  competition,  and  the  associa- 
tion has  the  responsibility  of  protecting  its  members'  interests. 
Many  associations  today  maintain  special  committees  on  the 
tariff  who  engage  experts  to  assist  them  in  studying  tariff  prob- 
lems and  in  preparing  such  schedules  as  will  be  accepted  by 
those  in  charge  of  enacting  the  laws. 


SERVICE    ACTIVITIES — PROTECTIVE  147 

Governmental  Commissions 

In  the  same  way  the  association  has  the  responsibility  of 
watching  governmental  commissions  that  sometimes  issue 
ultimata  without  being  fully  informed  as  to  all  the  facts  in  the 
case.  Trade  associations  accordingly  must  be  attentive  at  all 
times,  to  see  that  inadvertent  rulings  are  not  issued  which, 
though  prompted  perhaps  by  the  best  intentions,  are  disastrous 
to  important  industries.  A  somewhat  parallel  case  is  that  of 
the  investigations  undertaken  perhaps  rather  hastily  by  some 
governmental  department  which  put  the  manufacturer  or  mer- 
chant to  the  trouble  of  answering  long  questionnaires.  If  the 
investigation  is  unnecessary  it  should  be  stopped.  If  it  is 
necessary,  very  often  the  information  which  is  desired  can  be 
procured  from  the  file  kept  in  the  association  office  and 
thus  both  the  time  and  the  energy  of  the  members  can  be 
saved. 

Associations  at  the  Government's  Service 

But  if  some  of  the  functions  of  a  trade  association  are  to 
watch  the  government,  an  association  has  at  the  same  time  the 
power  of  rendering  to  the  government  patriotic  and  signal 
services.  When  the  War  Industries  Board  was  formed  and 
found  it  necessary  to  get  into  immediate  touch  with  the  vari- 
ous industries  in  this  country  the  representative  trade  associa- 
tions were  the  bodies  to  which  it  turned.  If  these  associa- 
tions with  their  fund  of  information  and  their  well-working 
organizations  had  not  been  in  existence,  it  would  doubtless 
have  impeded  the  progress  which  the  War  Industries  Board 
was  compelled,  as  rapidly  as  possible,  to  make.  Many  govern- 
ment officials  previous  to  the  war  realized  the  value  of  trade 
associations  as  the  best  existing  medium  of  direct  contact  be- 
tween the  government  and  industry.  The  war  undoubtedly 
accentuated  the  appreciation  of  the  trade  association  in  this 
respect. 


148  TRADE    ASSOCIATIONS 

Arbitration  Boards 

Somewhat  similar  to  the  protective  activities  of  an  associa- 
tion, is  its  arbitration  board,  which  protects  the  rights  of  mem- 
bers and  at  the  same  time  sees  that  both  parties  to  a  dispute  are 
justly  treated.  This  board  or  committee  may  vary  greatly  in 
its  make-up  and  in  the  scope  of  its  operations.  It  may  adjust 
differences  merely  between  members — although  in  this  case 
the  secretary  is  generally  the  arbitrator — or  between  members 
and  outsiders.  Or  it  may  be  a  central  body  to  which  the  gen- 
eral policies  and  regulations  of  two  related  associations  are 
finally  referred. 

Such  a  board  in  an  association,  composed  only  of  members 
of  the  association,  serves  as  an  industrial  court  of  equity  in  a 
specific  field  and  attempts  to  consider  impartially  the  interests 
of  all  concerned.  As  specialists  in  matters  pertaining  to  the 
trade  it  represents  its  members  are  generally  better  qualified  to 
adjust  trade  differences  than  an  ordinary  civil  court.  Its  de- 
cisions, in  the  absence  of  specific  agreements,  are  usually 
guided  by  a  code  of  ethics  or  a  set  of  regulations  covering  the 
various  phases  of  business  transactions  and  the  conditions 
attending  them.  Those  desiring  to  settle  their  differences 
through  the  arbitration  committee  agree  beforehand  to  abide 
by  its  decisions. 

Then  again  an  arbitration  committee  from  one  association 
may  meet  a  similar  committee  from  another  association,  the 
two  bodies  acting  as  a  committee  of  the  whole  to  arbitrate  a 
matter  between  certain  members  of  each  organization. 

An  Example  of  Arbitration 

An  interesting  case  of  an  arbitration  between  a  manufac- 
turer (an  association  member)  and  a  merchant  (the  manu- 
facturer's customer,  and  himself  a  member  of  another 
association)  arose  in  New  York  City  when  a  manufacturer  of 
woolen  goods  had  shipped  some  goods  to  a  merchant  in  New 


SERVICE   ACTIVITIES — PROTECTIVE  1 4') 

York  for  exporting.  The  merchant  received  them  in  good 
faith  and  turned  them  over  to  his  exporting  agent;  hut  upon 
examination  it  was  found  that  the  goods  had  heen  so  poorly 
packed  that  they  could  not  be  exported,  and  had  actually  been 
damaged  in  domestic  transit. 

The  manufacturer  claimed  that  he  had  packed  the  goods 
according  to  specifications.  The  merchant  claimed  that  the 
goods  were  not  packed  according  to  instructions  but  could  not 
show  that  he  had  given  any  instructions.  The  exporter  claimed 
that  the  goods  were  useless  to  him  as  they  were  damaged 
before  he  received  them  and  could  not  be  sold  in  a  foreign 
market. 

The  case  had  to  be  settled  by  arbitration.  So  the  manu- 
facturer selected  a  man  to  represent  his  interests ;  the  merchant 
and  the  exporter  selected  a  man  to  represent  their  interests; 
and  these  two  arbitrators  selected  a  third  disinterested  party, 
an  association  secretary.  Depositions  were  taken  from  all  con- 
cerned in  the  transaction  and  all  correspondence  relative 
thereto  was  examined.  The  three  arbitrators  finally  decided  in 
favor  of  the  manufacturer,  since  it  was  proved  by  custom  that 
the  merchant  in  placing  his  order  should  have  given  instruc- 
tions as  to  packing  inasmuch  as  he  was  aware  of  the  fact  that 
the  manufacturer  had  not  previously  done  any  packing  for 
export. 

The  manufacturer,  however,  was  required  to  pay  all  ex- 
penses of  the  investigation,  to  take  back  the  goods,  and  to  make 
a  similar  shipment  properly  packed  but  at  the  prevailing  market 
price  which  obtained  at  the  time  of  settlement.  In  this  way  the 
manufacturer  lost  no  business  and  received  a  market  price  for 
his  product,  and  the  merchant  was  not  left  with  damaged  goods 
on  his  hands.  Incidentally,  the  price  of  these  goods  had  so 
advanced  during  the  arbitration  that  the  manufacturer  was 
able  to  sell  them  at  a  price  which  paid  all  expenses  and  made 
him  a  profit  besides. 


150  TRADE    ASSOCIATIONS 

A  Conference  Committee 

A  conference  committee  composed  of  both  the  manufac- 
turers and  the  distributers  of  a  product  may  with  advantage 
meet  at  regular  intervals  and  discuss  matters  of  common 
interest.  The  manufacturers  as  the  source  of  supply  should 
set  before  the  distributers  their  particular  problems  and 
opinions  about  trade  conditions,  and  the  distributers  in  turn 
should  inform  the  manufacturers  concerning  demand  and  con- 
cerning trade  conditions  in  general  from  the  distributers'  point 
of  view.  When  the  conference  committee  adjourns  it  should 
then  be  arranged  that  each  member  of  the  committee  shall 
return  to  his  particular  locality  and  inform  all  the  manufac- 
turers or  all  the  distributers  respectively  in  his  locality  what 
general  information  was  brought  to  light  at  the  meeting. 

Weights  and  Measures 

The  campaign  for  uniform  laws  on  weights  and  measures 
now  being  conducted  by  several  associations  may  be  mentioned 
here.  As  the  laws  of  several  states  now  stand,  considerable 
confusion  exists  in  the  observance  of  standard  weights  and 
measures.  A  nationally  recognized  standard  would  be  a  great 
aid  to  industries  in  which  weights  and  measures  are  important 
features. 

The  smaller  associations  are  usually  concerned  with  district 
or  city  ordinances  regarding  prescribed  methods  of  measuring 
and  weighing.  The  officers  of  these  associations  confer  with  the 
proper  city  officials  in  order  to  prevent  any  intentional  mis- 
understanding on  the  part  of  members.  As  association  repre- 
sentatives can  offer  suggestions  and  information  that  reflect 
the  experience  of  each  member  of  their  industry,  they  are  able 
to  co-operate  effectively  with  the  city  administration  in  such 
details.  For  example,  a  dealer  on  one  street  corner  may  decide 
that  in  order  to  lose  no  possible  customers  he  must  keep  his 
shop  open  as  long  as  his  competitor  does  on  the  opposite  corner. 


SERVICE   ACTIVITIES — PROTECTIVE  15^ 

with  the  result  that  both  are  needlessly  extending  the  business 
day  and  depriving  themselves  of  holidays  and  of  health.  Most 
of  the  associations  of  retail  dealers  by  invoking  the  law  to 
correct  this  common  and  most  undesirable  practice  are  making 
it  possible  for  the  storekeeper  to  close  his  shop  at  a  reasonable 
hour. 

The  following  extract  from  a  monthly  letter  of  the  Brook- 
lyn Hardware  Dealers  Association  is  indicative  of  the  general 
sentiment  of  retailers  in  this  regard: 

Mr.  B.  reports  that  the  police  have  closed  the  hardware 
stores  on  Sunday  in  the  Ridgewood  section  owing  to  the 
pressure  brought  to  bear  by  this  Association,  and  that  two 
men  whose  stores  were  closed  were  so  pleased  that  they 
made  application  to  join  the  Association. 

Insurance 

In  connection  with  the  effort  to  reduce  the  element  of 
chance  in  business  the  question  of  insurance  is  attracting  the 
attention  of  many  trade  associations.  Insurance,  although 
properly  speaking  not  a  part  of  the  ordinary  business  operation 
of  an  association,  is  coming  to  be  recognized  as  a  rather  im- 
portant item.  It  is  a  well-known  fact  that  many  insurance 
companies  are  careless  in  selling  insurance  policies.  Then  the 
dealer  is  tempted  to  overinsure ;  and  when  he  does  there  is  the 
possibility  of  a  profitable  fire.  The  last  statement  may  seem 
an  exaggeration,  but  the  records,  of  at  least  one  leading 
industry,  and  of  its  association,  prove  it  to  be  the  fact.  As  a 
result,  policyholders  often  have  to  pay  higher  premiums  than 
necessary. 

Here  again  special  education  on  the  part  of  association 
members  is  of  considerable  value.  By  communicating  with  the 
insurance  committee  of  the  association  when  taking  out  policies 
or  when  rearranging  insurance,  members  may  secure  expert 
advice  regarding  proper  rates  and  premiums.    This  voluntary 


152  TRADE    ASSOCIATIONS 

insurance  committee,  moreover,  composed  of  members  of  the 
association  is  in  a  position  to  treat  more  successfully  with  the 
insurance  companies  themselves  in  an  effort  to  secure  more 
favorable  terms  for  the  industry.  The  insurance  companies 
welcome  an  approach  of  this  kind  and  will  furnish  experts  to 
go  through  an  industry  axid  revaluate  policies. 

Owing  to  the  fact  that  inspection  of  insured  property  is 
often  omitted  by  the  insurance  companies  the  policyholder  is 
frequently  left  ignorant  of  protective  precautions.  The  latest 
and  best  preventive  measures  are  studied  carefully  by  the  in- 
surance committee  of  the  association  so  that  all  members  may 
benefit  thereby.  In  times  of  unavoidable  misfortune,  moreover, 
insurance  adjustments  are  far  from  satisfactory.  The  insurance 
committee,  through  its  wide  experience  in  such  matters,  is 
nearly  always  able  to  secure  for  deserving  members  a  fair 
settlement  of  their  losses. 

Insurance  by  an  Association 

A  few  of  the  larger  trade  associations  have  gone  so  far  as 
to  establish  insurance  companies  of  their  own.  The  Laundry- 
mens  National  Association  has  brought  about  the  formation 
of  two  efficient  insurance  exchanges,  one  for  fire  and  one  for 
liability  insurance. 

"Through  the  operation  of  these  exchanges,  which  could 
not  exist  were  it  not  for  the  fact  that  laundrymen  have  an 
Association  of  national  importance,  hundreds  of  thousands  of 
dollars  have  been  saved  in  insurance  premiums.  And  our 
plants  have  been  given  better  protection  than  was  possible 
through  the  stock  companies'  plan  of  insurance."  This  is  the 
opinion  of  one  of  the  members. 

The  National  Retail  Hardware  Association,  with  the  aid  of 
several  of  its  branch  associations,  has  also  successfully  main- 
tained several  mutual  fire  insurance  companies.  These  com- 
panies were  organized  in  much  the  same  way  as  other  insurance 


SERVICE   ACTIVITIES — PROTECTIVE  153 

companies,  the  stock  being  bought  by  association  members.  At 
present  this  association  is  contemplating  an  educational  plan  as 
regards  fire  prevention,  to  be  worked  out  by  the  combined 
insurance  secretaries.  This  plan  includes  posters  and  pam- 
phlets on  fire  precaution  and  protection. 

Group  Insurance 

Still  another  variation  of  association  activity  is  found  in 
connection  with  group  insurance.  Trade  associations,  by  in- 
suring the  lives,  health,  or  interests  of  members  collectively, 
are  able  to  secure  reductions  of  from  25  to  50  per  cent  in  the 
premiums. 

Protection  Against  Theft 

The  Silk  Association  of  America  and  the  National  Jewelers 
Board  of  Trade  both  have  protective  departments,  the  former 
being  known  as  the  "Missing  Property  Bureau"  and  the  latter 
as  the  "Vigilance  Committee."  Both  of  these  departments 
watch  for  robberies  and  assist  any  member  in  recovering 
stolen  property. 

The  Silk  Association  has  recently  organized  the  Textile 
Transit  Insurance  Company  to  insure  safe  transportation  of 
silk  from  one  point  to  another.  The  new  company  investigates 
all  claims  and  guards  against  fraud  and  will  eventually  take 
over  all  the  functions  of  the  missing  property  bureau.  It  also 
operates  trucks,  properly  guarded,  between  New  York  and 
the  outlying  districts,  thus  reducing  the  probability  of  silk 
thefts. 

Better  Business — The  Typothetae  Plan 

The  "Three-Year  Plan"  of  the  United  Typothetae 

The  United  Typothetae  and  Franklin  Clubs  of  America,  a 
trade  association  composed  of  the  printers  of  the  country, 


154  TRADE    ASSOCIATIONS 

developed  and  has  carried  through  recently  what  it  called 
its  "Three-Year  Plan"  for  improvement  of  trade  conditions. 
The  plan  has  been  notably  successful.  As  it  offers  the  best 
example  of  how  a  trade  association  may  improve  conditions 
within  an  industry,  the  purpose  and  the  organization  developed 
for  carrying  out  the  plan  are  here  given  in  some  detail. 
It  was  thought  out  beforehand  with  the  utmost  care. 
When  put  to  the  test,  it  worked.  It  represents  an  actual 
successful  accomplishment. 

The  plan  involved  the  trade  education  of  printers,  lithog- 
raphers, photoengravers,  and  all  workers  allied  with  the  print- 
ing industry,  in  order  that  better  methods  might  be  pursued 
and  larger  results  obtained.  The  intent,  which  was  accom- 
plished to  a  very  large  degree,  was  to  reach  every  printer  in 
the  United  States,  to  get  him  interested  in  organization  work, 
and  to  secure  his  active  participation  in  everything  that  would 
tend  to  make  him  a  more  successful  business  man  and  a  better 
credit  risk. 

As  a  result,  the  printers  have  obtained  much  additional 
business.  The  various  interests  allied  to  the  printing  industry, 
the  concerns  manufacturing  or  dealing  in  paper,  ink,  type, 
machinery,  and  supplies  of  every  sort,  have  been  stimulated  by 
greatly  increased  consumption  of  their  goods.  Finally,  the 
consumers  of  printing  are  receiving  better  service  from  the 
printers ;  the  printing  is  of  higher  quality ;  and  the  price,  be- 
cause of  definite  knowledge  of  costs,  is  more  stable.  The 
single  item  of  standardization  of  costs,  indeed,  has  brought 
about  a  marked  improvement  in  the  entire  industry  and  the 
work  has  not  been  confined  to  three  years  but  has  been  kept 
up  so  as  to  maintain  the  good  results. 

General  Outline  of  the  Plan 

The  United  Typothetae  determined  that  they  would  carry 
through  their  plan  within  a  period  of  three  years — hence  the 


SERVICE   ACTIVITIES — PROTECTIVE  ^55 

title,  "Three-Year  Plan."     They  accomphshed  their  purpose 
successfully  and  easily  within  the  time  specified. 

The  general  lines  on  which  the  plan  was  built  were  simple. 
The  organizations  concerned  included  both  the  Typothetae  and 
the  allied  interests  already  mentioned.  The  activities  involved 
were,  first,  administrative,  and  second,  executive. 

Administrative  Activities 

The  administrative  activities  of  the  plan  were  handled  by 
three  bodies. 

1.  The  council — a  standing  body  composed  of  the  presi- 

dent, vice-president,  treasurer,  and  five  other  mem- 
bers of  the  Typothetae  who  represented  that  associa- 
tion in  all  matters  relating  to  the  plan. 

2.  The   advisory   committee — made   up   of    a   group   of 

individuals  selected  from  the  participating  allied 
industries,  who  represented  these  industries  in  an 
advisory  capacity  as  regards  inaugurating  and  carry- 
ing out  the  plan. 

3.  The  joint  committee — composed  of  the  council  and  the 

advisory  committee,  was  the  final  authority  which 
passed  upon  and  directed  all  activities  of  the  plan. 

Executive  Activities 

The  executive  part  of  the  plan  was  under  the  direction  of 
the  employed  officers  of  the  Typothetae,  namely,  the  general 
secretary  and  his  various  assistants.  The  executive  work  was 
divided  into  four  departments,  each  of  which  was  in  charge 
of  a  director: 

1.  Organization  and  extension 

2.  Education  and  cost  accounting 

3.  Research  and  service 

4.  Direct-by-mail  advertising 


156  TRADE   ASSOCIATIONS 

I.  Organization  and  Extension  Department 

The  organization  and  extension  department  had  charge  of 
all  extension  work,  of  directing  the  field-men  and  local  secre- 
taries, and  of  getting  the  printers  of  the  United  States  to 
work  together  either  through  local  associations  or  through 
direct  membership  in  the  national  organization.  This  de- 
partment took  charge,  also,  of  any  special  activities  that  were 
suggested  by  the  joint  committee. 

Field  Work 

The  field-men  who  went  out  from  the  national  headquarters 
to  get  printers  in  local  communities  interested  and  to  carry  on 
all  kinds  of  organization  work  for  the  furtherance  of  the  plan, 
were  selected  for  their  particular  fitness  for  organizing  work. 
Before  they  were  sent  into  the  field,  they  received  special 
training  in  the  school  of  instructions  maintained  at  the 
national  headquarters  of  the  Typothetae  in  Chicago. 

In  each  district  new  local  divisions  of  printers  were  organ- 
ized by  the  field-men,  with  a  local  secretary  in  charge  of  each 
division.  This  local  secretary  also  received  special  training  at 
the  headquarters  school.  The  field-men  and  the  local  secre- 
taries worked  in  close  harmony  along  definitely  prescribed 
lines.  After  the  larger  towns  were  covered,  memberships  were 
procured  also  in  smaller  places,  and  visits  were  continued  to 
both  larger  and  smaller  towns  until  all  parts  of  each  district 
were  fully  brought  into  the  plan. 

Field  Representatives — Their  Varied  Duties 

The  field-men  and  the  local  secretaries  had  many  other 
duties,  all  contributory  to  the  general  aim  of  standardization 
throughout  the  industry.  They  explained  to  the  representatives 
of  the  printing  crafts  in  their  territory  the  advantages  of  the 
standard  price  list  and  sought  to  interest  them  in  the  creative 
selling  campaign.     They  were  careful  not  only  to  indicate  the 


SERVICE    ACTIVITIES — PROTECTIVE  157 

advantages  and  protection  in  connection  with  credits  and  col- 
lections but  to  urge  the  representatives  of  the  printing  crafts 
to  be  more  prompt  in  fulfilling  their  own  credit  obligations. 
They  secured  contracts  for  uniform  cost  installation,  took  sub- 
scriptions for  the  series  of  textbooks  issued  in  connection  with 
the  plan,  and  wrote  fire  insurance  for  the  several  companies 
that  specialize  in  printing-house  risks.  They  sought  to  interest 
printers  in  the  work  of  the  trade-schools,  and  in  the  special 
courses  in  estimating  and  salesmanship. 

In  addition,  the  field-men  or  other  representatives  from 
general  headquarters  gave  lectures  on  "business  building  by 
direct  publicity"  before  commercial  bodies,  merchants'  and 
manufacturers'  associations,  advertising  clubs,  and  other  or- 
ganizations, and  also  before  gatherings  of  salesmen  and  other 
employees  of  financial,  mercantile,  and  manufacturing  con- 
cerns of  every  sort.  They  outlined  possible  plans  for  munici- 
pal, corporate,  and  individual  advertising  campaigns;  they 
gave  addresses  on  creative  selling  before  assemblies  of  printers 
and  graphic  arts  representatives  regardless  of  affiliation  or 
association;  and  through  correspondence,  they  suggested  to 
every  printer  in  every  city  unique  and  practical  business- 
getting  ideas  for  keeping  direct  advertising  in  the  spot-light. 

Control  of  Field  Representatives 

The  national  office  supplied  each  field-man  and  local  secre- 
tary with  a  complete  treatise  on  organization  that  showed  the 
best  method  of  obtaining  results — securing  attention,  creating 
interest,  creating  a  desire  for  membership,  and  successful 
"closing-up" — as  practiced  in  expert  salesmanship.  This 
treatise  prevented  haphazard  individual  information  being 
given  in  different  districts  and  cities,  or  the  use  of  secretarial 
methods  that  were  widely  at  variance,  just  as  a  railroad  book 
of  rules  insures  that  no  one  division  shall  be  operated  inde- 
pendently of  all  others.    In  addition,  daily  reports  of  activities 


158  TRADE   ASSOCIATIONS 

and  experiences  were  sent  by  the  field  representatives  to  the 
general  headquarters,  and  in  response,  the  national  office  sent 
back  to  each  man  special  advice  as  to  his  particular  problems. 
Finally,  semiannual  meetings  of  all  the  field-men  and  local 
secretaries  were  held  at  the  national  headquarters  at  the  ex- 
pense of  the  national  association,  one  such  occurring  regularly 
at  the  time  of  the  national  convention  of  the  United  Typothe- 
tae.  In  this  way,  the  field-men  and  secretaries  were  kept  in 
touch  with  one  another  and  with  the  members  of  the  associa- 
tion. Thus,  with  competent  men  working  in  every  district  in 
the  United  States,  all  controlled  by  the  central  office  in 
Chicago,  every  part  of  the  country  was  brought  into  actual 
contact  with  the  comprehensive  plan. 

2.  Educational  and  Cost  Accounting  Department 

The  educational  and  cost  accounting  department  had  under 
its  supervision  all  educational  activities.  It  gave  instruction 
in  composition,  press  work,  bookbinding,  and  the  work  of  other 
related  trades,  and  also  in  cost  finding,  estimating,  and  sales- 
manship. A  staff  of  seven  cost  accountants  had  the  special 
duty  of  installing  the  standard  cost  finding  system  in  printing 
plants  in  all  sections  of  the  United  States. 

Regular  textbooks  were  issued  and  schools  established,  one 
of  which,  in  Indianapolis,  was  conducted  along  the  lines  of 
a  correspondence  school.  The  course  in  cost  estimating,  as 
has  been  observed,  brought  about  a  nation-wide  uniformity  in 
the  method  of  estimating  printing,  based  upon  definite  records 
of  cost,  and  thereby  established  a  higher  standard  of  selling 
prices  and  insured  a  real  and  constant  profit.  This  course  was 
furnished  to  all  printers  with  merely  a  nominal  charge  for 
necessary  forms  and  blanks.  The  only  requirement  was  that 
each  printer  who  took  the  course  or  who  had  his  employees 
take  it  had  to  sign  an  agreement  to  complete  it,  to  give  careful 
study  to  each  lesson,  to  submit  his  study  papers  to  the  school 


SERVICE   ACTIVITIES — PROTECTIVE  ^59 

for  analysis  and  criticism,  and  to  take  examinations  in  the 
regular  way,  just  as  in  a  correspondence  school  where  the  usual 
fees  are  charged. 

Likewise  a  course  in  selling  methods  was  taught,  designed 
to  show  alike  to  the  proprietor  of  a  printing  shop,  the  desk 
salesman,  the  city  man,  and  the  traveler  the  proper  methods  of 
disposing  of  a  product  at  a  profit,  and  of  increasing  the  volume 
of  business.  To  answer  the  need  of  those  who  could  not  take 
this  salesmanship  course,  special  treatises  were  prepared  and 
printed  for  general  circulation. 

These  standard  courses  reached  thousands  of  students  of 
printing  through  a  large  number  of  schools  throughout  the 
country :  the  United  Typothetae  and  Franklin  Clubs  School  of 
Printing  at  Indianapolis,  the  printing  department  of  the  Car- 
negie Institute  of  Technology  at  Pittsburgh,  the  School  of 
Business  Administration  of  Harvard  University  at  Cambridge, 
the  state  universities,  the  local  Typothetae  divisions,  and  over 
two  hundred  private  and  public  schools  besides.  It  can  readily 
be  appreciated  what  a  great  service  these  courses  rendered  not 
only  to  the  printers  but  to  the  allied  interests  and  to  the  ulti- 
mate consumer  of  printing  as  well,  through  raising  the  stand- 
ards of  printing  everywhere. 

3.  Research  and  Service  Department 

The  research  and  service  department  had  charge  of  the 
various  kinds  of  service  to  be  rendered  to  the  members  and 
the  allied  industries.  It  employed  a  large  corps  of  persons  in 
collecting  information  on  a  wide  range  of  subjects. 

4.  Direct-by-Mail  Advertising  Department 

The  department  in  charge  of  direct-by-mail  advertising 
maintained  a  corps  of  lecturers  who  traveled  over  the  country, 
carrying  with  them  exhibits  of  printing,  to  explain  to  the  local 
printers   the   various   kinds  of   high-grade   printing  and   the 


l6o  TRADE    ASSOCIATIONS 

methods  required.  The  purpose  was  to  create  in  each  locality 
a  greater  interest  in  direct-by-mail  advertising  and  thereby 
increase  the  volume  of  local  printing.  To  supplement  the 
exhibitions  and  lectures,  the  department  issued  literature  de- 
signed to  show  the  printer  how  to  create  direct-by-mail  adver- 
tising, and  pointing  out  to  him  the  utter  fallacy  of  trying  to 
increase  his  volume  of  business  by  taking  business  from  his 
competitors.  At  regular  intervals,  also,  literature  was  sent 
through  carefully  selected  mailing  lists  to  the  consumers  of 
printing  in  various  lines  of  business,  showing  them  the  need 
of  direct  advertising.  This  mailing  list  was  compiled  by  the 
general  office  from  information  furnished  by  the  local  printers, 
and  the  literature  sent  out  was  accompanied  by  a  letter  urging 
business  houses  to  place  their  orders  for  direct-by-mail  adver- 
tising, such  as  catalogues,  booklets,  etc.,  with  the  printers  in 
their  particular  localities. 

Frank  Stockdale,  of  System,  a  well-known  authority  on 
direct-by-mail  advertising,  has  stated  that  previous  to  the 
working  out  of  this  plan  the  printers  were  furnishing  scarcely 
one-eighth  of  the  direct  printing  needed  by  the  various  indus- 
tries. Some  idea  of  the  far-reaching  results  of  a  plan  of  this 
kind  may  be  gained  from  the  fact  that  the  amount  of  direct- 
by-mail  printing  has  already  increased  from  about  $175,- 
000,000  yearly  to  over  $350,000,000  as  a  result  of  this  three- 
year  plan.  The  nation-wide  campaign  awakened  interest  in  the 
printers  and  consumers  of  printing  throughout  the  country  as 
to  the  value  and  earning  power  of  printed  literature  when  sent 
direct  to  prospective  purchasers  of  articles  to  be  marketed. 

This  plan  has  paid  for  itself  many  times  over.  It  is 
today  keeping  the  printing  plants  up  to  normal  production  by 
the  addition  of  new  business.  It  has  destroyed  the  old  ten- 
dency to  seek  volume  regardless  of  price  and  has  enabled  the 
printer  to  become  creative  rather  than  destructive  in  his  busi- 
ness methods.     It  has  also  had  the  effect  of  increasing  the 


SERVICE   ACTIVITIES — PROTECTIVE  l6l 

printer's  purchasing  power,  in  a  great  measure  eliminating  the 
losses  so  long  endured  from  questionable  credits. 

The  Financial  Basis  of  the  Three-Year  Plan 

The  plan  was  financed  chiefly  by  the  Typothetae ;  the  allied 
interests  paid  voluntarily  whatever  they  felt  to  be  proper  in 
view  of  the  benefit  to  themselves  directly  and  indirectly.  In 
five  years — including  the  two  years  previous  to  the  three  years 
of  active  effort — the  national  organization  of  the  Typothetae 
spent  $348,773.73  or  approximately  $70,000  a  year.  Besides 
this  amount  the  local  organizations  spent,  in  191 5,  $160,093.1 1 
in  supplementing  the  work  of  the  national  organization, 
making  a  total  cost  to  the  Typothetae  of  $230,000  for  the 
entire  work  of  the  plan.  While  the  manufacturing  and  jobbing 
interests  in  many  communities  subscribed  to  local  associations, 
still  tlie  burden  of  the  financial  support  of  the  plan  fell  most 
heavily  upon  the  national  organization  and  its  members. 

The  allied  interests  contributed  $75,000  for  the  entire  three 
years  of  the  plan.  Payments  w'ere  made  in  36  monthly  instal- 
ments, which  brought  down  the  contribution  of  each  company 
participating  to  a  very  small  and  convenient  amount. 


CHAPTER  XII 

BRANCH  ASSOCIATIONS 

Special  Activities 

There  are  certain  activities  in  which  associations  are  con- 
cerned that  are  so  extensive  as  to  require  special  permanent 
organizations  to  handle  them. 

The  following  activities  relating  to  costs,  sales,  purchases, 
exports,  vocational  and  technical  matters,  being  more  widely 
developed  or  more  special  in  nature  and  appeal,  are  usually 
handled  by  branch  associations  which  are  affiliated  with  the 
general  association  and  composed  of  such  representatives  of 
the  firm  making  up  the  general  association  as  are  interested  in 
the  special  activity. 

A  Cost  Association 

The  organization  of  a  cost  association  within  an  industry 
would  have  been  considered,  only  a  few  years  ago,  an  impos- 
sibility. Today  it  is  a  familiar  fact.  As  manufacturers 
gradually  began  to  realize  that  rule-of-thumb  methods  of 
estimating  were  obsolete  and  expensive,  indeed,  often  ruinous, 
they  looked  more  and  more  into  the  cost  of  making  their 
product  and  began  to  base  their  price  thereon. 

The  method  of  procedure  for  an  association  in  establishing 
a  uniform  cost  system  is  presented  in  Chapter  XIII,  so  that  all 
that  will  be  given  here  are  a  few  suggestions  as  to  how  a  cost 
association  can  supervise,  establish  interest  in,  and  develop 
such  a  system. 

The  cost  association,  of  course,  is  made  up  chiefly  of  the 
cost  men  of  the  various  members  of  the  main  organization. 
These  men  get  together  at  different  meetings  to  discuss  funda- 

162 


BRANCH    ASSOCIATIONS  163 

mental  principles  of  costs  in  relation  to  the  particular  industry 
in  which  they  are  interested.  Some  will  say  that  these  men 
cannot  confer  without  giving  up  the  private  facts  of  their 
employers'  businesses.  No  one  asks  them  to  do  this,  but  on 
the  basis  of  "give  and  take"  they  can  discuss  different  theories 
and  methods  of  doing  things;  and  any  member  who  has  sent 
his  cost  man  to  such  a  meeting  will  find  out  that  it  has  been 
a  good  investment  of  time  and  money. 

The  cost  association  should  have  as  its  secretary  if  possible 
the  man  who  put  the  cost  system  in  the  industry.  He  can  then 
act  in  an  advisory  capacity  to  the  industry  in  matters  of  cost, 
just  as  the  manager  of  the  advertising  bureau  or  the  manager 
of  the  traffic  bureau  acts  as  adviser  in  his  particular  field. 

A  Statement  of  Purpose  and  Procedure 

One  of  the  leading  cost  associations  recently  organized  is 
that  of  the  paper  and  pulp  industry.  Its  purpose  and  pro- 
cedure are  set  forth  in  the  following  statement. 

Purpose 

The  Cost  Association  of  the  Paper  Industry  was  organized  for 
the  purpose  of  bringing  about  co-operation  to  a  high  degree  among 
manufacturers  of  pulp  and  paper  and  converters  of  paper  to  the 
end  that  there  might  be  developed,  in  every  plant,  a  cost  system  that 
will  furnish  proper  methods  of  control  leading  towards  economies 
in  cost  of  production ;  and  to  assist  in  making  the  future  of  the 
industry  economically  secure,  through  the  promotion  of  the  sound 
business  principle  of  taking  into  prominent  consideration  costs, 
accurately  determined,  when  making  selling  prices. 

Membership 

The  membership  today  is  composed  of  paper  and  pulp  mills  and 
converters  of  paper  located  in  the  United  States  and  Canada.  INIember 
mills  may  designate  any  representative  or  representatives  of  their 
organizations,  preferably  executives  or  cost  men,  to  attend  the  official 
meetings  of  the  association. 


l64  TRADE    ASSOCIATIONS 

Plan  of  Action 

Co-operative  effort  is  the  basis  of  all  Cost  Association  activity. 
A  definite  plan  of  action  has  been  worked  out;  first,  by  working 
through  classified  group  committees  in  conjunction  with  a  committee 
on  co-operation,  and  second,  by  the  formation  of  local  divisions  in 
various   paper   and  pulp   centers. 

Classified  Group  Committees 

Classified  group  committees  have  been  selected,  or  are  in  the 
process  of  selection,  for  each  branch  of  the  industry.  The  classified 
group  committees  handle  all  matters  and  all  work  relating  to  their 
respective  branches  between  convention  periods  and  take  responsibility 
for  furnishing  programs  of  interest  in  connection  with  the  national 
conventions.  The  chairmen  of  these  committees  are  usually  mill 
executives — other  members  being  executives,  executive  accountants, 
and  cost  men.  The  classified  group  committees  after  agreement  on 
cost  fundamentals  will  devise  simple,  uniform,  and  elastic  cost  sys- 
tems for  their  respective  divisions  of  the  industry. 

Committee  on  Co-operation 

The  committee  on  co-operation  is  composed  of  cost  experts,  one 
from  each  of  the  important  branches  of  the  industry.  The  cost 
expert  on  the  committee  on  co-operation  representing  each  particular 
branch  of  the  industry  automatically  becomes  a  member  of  the 
corresponding  classified  group  committee.  In  this  way  this  experience 
is  always  available  for  work  in  conjunction  with  his  classified  group 
committee,  and  through  his  membership  on  the  committee  on  co-opera- 
tion the  accumulated  experience  of  the  entire  committee  becomes 
available  for  use  by  his  classified  group  committee. 

Individual  Service 

The  officers  and  executive  committee  and  members  of  the  com- 
mittee on  co-operation  are  ready  to  visit  any  member  on  request, 
for  the  purpose  of  rendering  such  advisory  cost  accounting  service 
and  assistance  as  may  be  desired.  The  only  expense  to  members 
receiving  this  service  will  be  traveling  costs  of  committeeman. 

The  classified  group  committees  plus  the  aid  and  assistance  of 
the  committee  on  co-operation  furnish  ideal  machinery  for  doing 
constructive  work  for  each  branch  of  the  industry. 


BRANCH    ASSOCIATIONS  165 

Local  Divisions 

Local  divisions  have  been  formed  in  principal  paper  and  pulp 
centers.  Eight  of  these  locals  have  already  been  organized  or  are 
in  the  process  of  formation.  A  local  division  offers  an  opportunity 
for  periodical  meetings  of  executives  and  cost  men  to  discuss  ways 
and  means  for  the  betterment  of  actual  cost  work  in  their  respective 
plants,  for  the  exchange  of  ideas,  for  the  development  of  the  "get- 
together"  spirit,  and  for  the  fostering  of  a  feeling  of  friendliness 
among  competitors. 

Superintendents,  foremen,  and  technical  men  are  invited  to  local 
division  meetings.  Joint  meetings  of  Cost  Association  local  divisions 
and  branches  of  the  Technical  Association  of  the  Paper  Industry 
and  branches  of  the  American  Paper  and  Pulp  Mill  Superintendents 
Association  are  arranged  from  time  to  time.  These  meetings  are 
beneficial  in  bringing  about  better  understanding  and  better  co-opera- 
tion between  the  cost  men  and  the  technical  men  of  the  industry. 

Commercial  Education 

Co-operative  work  with  universities  conducting  courses  in  higher 
commercial  education  has  been  initiated.  This  phase  of  Cost  Associa- 
tion activity  is  unlimited  in  its  possibilities. 

National  Conventions 

National  conventions  of  two  days'  duration  are  held  three  or 
more  times  a  year.  These  conventions  furnish  opportunity  for  dis- 
cussing general  economic  and  accounting  problems  affecting  the 
industry  as  a  whole;  and  also  offer  opportunity  for  the  discussion 
of  the  specific  problems  of  each  branch  of  the  industry — this  latter 
discussion  is  conducted  at  the  special  meetings  of  the  various  classified 
groups,  usually  on  the  second  day  of  the  convention. 

New  York  Office 

Permanent  offices  have  been  established  in  New  York  City  in 
charge  of  a  secretary-treasurer,  who  is  experienced  in  general 
accounting,  as  well  as  paper-mill  cost  accounting.  Cost  forms  and 
cost  charts  of  some  of  the  member  mills  who  have  up-to-date  cost 
systems  are  on  file  for  inspection.  Eventually  it  is  hoped  that  cost 
statistics  of  value  may  be  compiled  and  disseminated  for  the  informa- 
tion and  benefit  of  members. 


1 66  TRADE   ASSOCIATIONS 

The  New  York  office  is  prepared  to  render  definite  service  to 
member  mills: 

1.  By  arranging  for  a  member  of  the  committee  on  co-operation 
to  visit  any  member  concern  to  help  in  straightening  out  knotty 
problems  in  the  cost  accounting  system  there,  or  to  confer  with  a 
member  concern  which  is  contemplating  a  new  installation.  The 
only  expense  to  the  member  concern  will  be  the  cost  of  the  committee- 
man's travel. 

2.  By  arranging  for  a  representative  or  representatives  of  one 
member  concern  to  visit  the  plants  of  other  members  who  have 
thoroughly  reliable  and  up-to-date  cost  systems  in  actual  use.  Visits 
of  this  character  are  of  great  value  in  that  an  inspection  of  cost 
accounting  methods  in  successful  operation  undoubtedly  aids  mills 
not  so  fortunately  situated  to  obtain  better  results.  Or,  in  the  case 
of  a  new  installation,  a  first-hand  knowledge  of  what  has  been  done 
by  mills  that  have  successfully  developed  their  cost  work  will  help 
another  concern  to  avoid  the  troubles  encountered  in  the  process. 

3.  By  furnishing  up-to-date  information  and  literature  pertaining 
to  cost  accounting. 

Association  Bulletin 

An  official  Association  bulletin  is  issued  periodically  when  there  is 
"something  to  say."  The  bulletin  serves  as  a  medium  for  the  exchange 
of  ideas  and  as  a  chronicle  of  Association  activities. 

Salesmen's  Associations 

When  the  main  or  large  association  of  an  industry  meets, 
the  members  are  generally  represented  by  their  executives.  In 
most  cases  this  does  not  mean  their  salesmen. 

But  the  salesmen  out  on  the  "firing  line"  are  the  men  who 
are  constantly  coming  in  contact  with  all  the  varying  conditions 
of  trade  and  also  with  the  rumors  which  accom.pany  them.  If 
a  salesman  is  himself  sold  to  the  idea  of  association  effort  and 
the  fundamentals  for  which  an  association  stands,  he  can  be- 
come one  of  the  best  supporters  of  that  association  in  any 
particular  part  of  the  industry.  If  he  is  not  embued  with  the 
spirit  of  co-operation  but  maintains  the  old  attitude  of  cut- 
throat competition  and  an  endeavor  to  get  the  better  of  his 


BRANCH    ASSOCIATIONS  167 

competitor,  he  can  do  a  great  deal  of  harm  in  tearing  down 
the  spirit  and  work  of  a  trade  association. 

Getting  the  Association  Point  of  View 

Consider  the  case  of  a  salesman  representing  a  certain 
house,  who  is  not  in  sympathy  with  co-operative  association 
effort.  Being  only  human  he  will  naturally  look  out  for  him- 
self first.  If  he  sees  that  he  is  to  lose  a  sale  he  wall  be  reluctant 
about  suggesting  any  trade  custom  or  standardized  condition 
to  which  the  customer  may  object.  A  majority  of  purchasers 
still  believe  it  to  be  good  practice  to  try  to  convince  a  sales- 
man that  they  can  get  better  conditions  from  other  houses. 
The  salesman  who  is  not  appreciative  of  association  effort,  and 
who  is  not  informed  as  to  the  real  conditions  behind  his  indus- 
try, will  be  apt  to  make  concessions  to  the  purchaser  and  take 
a  chance  of  a  reprimand  from  his  employer,  hoping  that  the 
large  order  which  he  books  will  soften  the  tongue  of  criticism. 
Then  in  order  to  justify  his  own  conduct  he  will  go  back  to 
his  employer  and  enlarge  upon  the  malpractices  of  competitors. 
The  employer  cannot  help  wondering  if  the  other  members  of 
the  association  are  playing  fair  with  him.  Sometimes,  indeed, 
he  becomes  suspicious  of  them  and  doubtful  of  the  usefulness 
of  the  association. 

On  the  other  hand,  let  a  salesman  go  out  who  realizes  the 
advantages  of  co-operative  effort  and  who  knows  the  real  facts 
concerning  the  present  conditions  in  his  industry;  when  that 
man  meets  a  customer  who  tries  to  put  something  over  and  to 
gain  certain  concessions  to  which  he  is  not  entitled,  the  sales- 
man wall  stand  up  for  his  rights.  Invariably  the  statements 
of  the  customer  will  fade  away,  simply  because  they  are  not 
based  on  facts.  When  this  salesman  hears  rumor  and  talk  as 
regards  conditions  in  the  industry,  supply  and  demand,  etc.,  he 
is  in  a  position  to  sift  the  true  from  the  false  and  to  tell  the 
customer  what  the  facts  are.     In  this  way  foolish  rumor  is 


1 68  TRADE    ASSOCIATIONS 

killed  and  useful  time  is  saved.  The  salesman  does  not  return 
to  his  employer  with  a  lot  of  yarns  and  gossip,  and  his  employer 
is  not  led  to  become  suspicious  of  his  competitors  or  doubtful 
as  to  the  desirability  and  work  of  his  trade  association. 

Salesmen  and  the  Association  Meeting 

Of  course  the  employer  or  the  executive  naturally  should 
keep  his  salesmen  informed  concerning  the  matters  that  have 
been  discussed  at  an  association  meeting.  Often,  however,  he 
does  not  have  the  opportunity ;  often  he  forgets.  It  would 
be  quite  proper  that  salesmen  should  be  present  at  an  associa- 
tion meeting,  except  that  unfortunately  salesmen  at  times  are 
inclined  to  tell  an  executive  how  he  ought  to  run  his  business 
and  in  attending  association  meetings  they  have  had  too  much 
to  say  as  regards  things  in  which  they  are  not  particularly 
concerned.  This  is  not  written  in  the  least  as  criticism  of 
salesmen  but  is  merely  a  commentary  on  hmnan  nature.  Then, 
too,  in  the  meeting  of  an  association  the  executives  want  to 
discuss  matters  of  private  interest  to  them  and  which  they  do 
not  wish  the  salesmen  of  other  companies  to  know.  If  sales- 
men in  attending  meetings  could  always  be  trusted  not  to  go 
out  and  try  to  ingratiate  themselves  with  some  customer  by 
telling  that  customer  what  transpired  in  the  meeting,  this  diffi- 
culty would  be  less  likely  to  present  itself. 

As  a  result  of  the  conditions  that  exist  and  of  the  frailty 
of  human  nature,  the  salesmen  without  their  own  association 
are  often  insufficiently  informed  as  to  the  desirability  of 
co-operative  effort  and  as  to  general  trade  conditions. 

A  Special  Association 

Salesmen  should  have  an  association  which  should  meet 
several  times  a  year  for  the  purpose  of  discussing  two  things 
in  particular :  better  sales  methods,  and  facts  concerning  the 
industry.     The  salesmen  out  on  the  field  are  the  men  who 


BRANCH    ASSOCIATIONS  169 

actually  put  into  practice  the  principles  laid  down  by  the  execu- 
tives through  the  general  association.  They  constitute  also  the 
chief  agency  for  disseminating  trade  information  by  word  of 
mouth.    They  should  therefore  know  whereof  they  speak. 

A  salesmen's  association  should  have  the  usual  officers, 
and  if  it  is  large  enough,  a  regular  secretary  who  has  had  good 
experience  as  a  salesman.  He  should  be  in  a  position  to  act 
as  an  adviser  to  the  concern  he  represents  as  regards  their 
sales  policies,  and  especially  helpful  in  shaping  the  principles 
and  policies  of  their  salesmen. 

As  salesmen  are  always  full  of  good  ideas  and  initiative, 
the  development  and  features  of  a  salesmen's  association  can 
be  left  to  them  with  the  assurance  that  in  a  short  while  it  will 
be  made  a  success. 

Purchasing  Association  or  Agency 

Some  associations  have  found  it  desirable  to  have  a  pur- 
chasing association,  agency,  or  bureau.  The  activities  of  this 
bureau  should  be  carefully  supervised  as  to  their  legal  limita- 
tions It  should  not  be  a  distinct  part  of  the  main  association 
but  rather  operated  independently  as  a  corporation  conducted 
for  the  interests  of  any  members  who  wish  to  participate  in  its 
service.  It  will  readily  be  appreciated  that  in  purchasing  sup- 
plies for  a  group  of  manufacturers  considerable  care  must  be 
taken  that  no  restraint  in  trade  or  undue  preference  is  shown, 
and  that  there  is  an  equitable  distribution  of  the  product 
among  all  the  members  of  the  corporation.  The  work  should 
be  in  the  hands  of  an  expert  buyer,  and  the  procedure  of  such 
a  purchasing  corporation  or  association  should  be  along  the 
lines  of  any  kind  of  a  joint  purchasing  organization. 

The  Right  of  an  Association  to  Purchase  Supplies 

Manufacturers  who  use  a  certain  material — for  example, 
leather — in  the  manufacture  of  their  product  may  find  them- 


170  TRADE    ASSOCIATIONS 

selves  confronted  with  the  scarcity  of  this  material  and  victim- 
ized by  the  dealers.  The  dealers,  taking  advantage  of  the 
scarcity,  extort  inordinate  prices  from  the  manufacturers,  who 
in  turn  cut  one  another's  throats  in  their  efforts  to  obtain 
supplies.  The  consequent  excessive  cost  of  raw  material  may 
cause  a  terrific  increase  in  the  cost  of  production  and  an 
inevitable  increase  in  the  price  of  the  product  to  the  consumers. 
In  order  to  obtain  the  necessary  supply  of  leather  at  reason- 
able prices,  and  to  avoid  gouging  by  the  dealers,  the  manu- 
facturers might  desire  to  co-operate  with  each  other  in  the 
purchase  of  leather.  This  end  cannot  be  obtained  by  any 
arrangement  between  the  manufacturers  by  which  they  will 
agree  not  to  bid  against  each  other  in  making  purchases,  since 
such  an  agreement  is  in  effect  a  deceit  upon  the  sellers  who 
have  an  undoubted  right  to  a  free  market.  On  the  other 
hand,  there  seems  to  be  little  doubt  that  companies  can  appoint 
a  common  agent  to  buy  for  them. 

In  a  recent  legal  case  five  local  corporations  who  were  all 
jobbers  of  Pine  Bluff,  Arkansas,  and  two  foreign  manufac- 
turers organized  a  corporation  in  which  each  took  and  paid  for 
shares.  There  was  no  agreement  or  understanding  that  they 
should  cease  dealing  with  a  local  broker,  but  there  was  evidence 
that  local  jobbers  would  not  purchase  from  him  unless  he 
would  quote  prices  sufficiently  low  to  neutralize  the  advan- 
tages of  purchasing  through  their  own  agency.  Furthermore, 
other  foreign  manufacturers  ceased  to  employ  the  broker  and 
placed  their  accounts  with  the  purchasing  corporation.  The 
court  said: 

The  five  jobbers  undoubtedly  conceived  a  purpose  to 
save  the  brokerage  charges  which  they  had  before  then  been 
required  to  pay  by  negotiating  their  purchases  through  their 
own  agency.  ...  It  cannot  be  doubted  that  the  five  jobbers 
could  have  given  their  brokerage  business  to  any  broker  on 
terms  to  be  agreed  upon,  and  it  seems  equally  clear  that 


BRANCH    ASSOCIATIONS  17^ 

by  participating  in  the  organization  and  ownership  of  the 
brokerage  company  they  did  no  more  than  this  .  .  .  for 
there  was  no  obligation  expressed  or  implied,  requiring  them 
to  deal  with  the  brokerage  company  except  and  so  far  only 
as  their  best  interests  from  time  to  time  dictated.  The  worst 
that  can  be  said  is  that  the  parties  availed  themselves  of 
certain  advantages  and  opportunities  which  their  relation 
to  the  brokerage  business  gave  them,  and  which  materially 
aided  them  in  the  race  of  competition.  Free  competition  is 
the  life  of  trade  and  commerce,  and  it  is  quite  as  important 
to  approve  all  lawful,  fair,  and  reasonable  expedients  devised 
to  promote  individual  success  as  it  is  to  condemn  vicious 
and  unlawful  practices  which  violate  individual  right  and 
the  public  weal. 

It  is  not  believed  that  the  words  of  Sections  i  and  2  of 
the  Sherman  Law  or  Section  3  of  the  Clayton  Act  would 
prevent  a  common  agency  in  the  absence  of  an  unlawful  pur- 
pose to  monopolize  business.  The  general  basis,  however,  of 
all  the  cases  supporting  common  agency  is  that  the  parties 
concerned  must  show  that  there  is  no  agreement  among  them 
to  deal  exclusively  with  some  common  agent.  But  to  make 
such  a  common  agency  really  effective,  it  would  seem  to  be 
almost  necessary  not  only  that  all  the  parties  deal  with  the 
agency  but  that  they  have  an  understanding  that  they  would 
so  deal  with  it.  All  legal  cases  on  this  subject  are  strongly 
against  any  agreement  for  the  pooling  of  profits  by  purchasing 
between  competitors  who  are  members  of  a  mutual  purchasing 
association  upon  the  ground  that  they  prevent  or  restrict  com- 
petition by  control  or  regulation  of  the  market  price  of  a  com- 
modity. 

The  conclusion  from  these  legal  cases  is  that  any  manu- 
facturers without  agreement  for  exclusive  buying  may  furnish 
the  funds  for  the  incorporation  of  a  purchasing  agency;  and 
that  each  of  the  members  of  an  association  may  place  with 
such  agency  such  advance  orders  as  it  sees  fit  for  the  purchase 
of  its  supplies ;  and  that  such  purchasing  agent  may  purchase  in 


172  TRADE   ASSOCIATIONS 

the  market  for  all  its  principals  and  may  charge  them  a  fair 
average  price  for  the  product  bought  and  sold  in  the  open 
market. 

The  matter  of  distribution  of  supplies  purchased  should  not 
be  controlled  by  any  agreement  between  the  members,  but 
simply  by  agreement  between  the  member-customer  and  the 
purchasing  agency.  The  agency,  by  this  agreement,  should 
be  given  power  to  deliver  the  amount  ordered  through  it  or  so 
much  thereof  as  it  could  obtain  for  the  particular  member- 
customer.  Then  the  purchasing  agency  dealing  as  principal 
would  be  protected  against  liability  for  not  making  full  deliv- 
ery; the  respective  manufacturer,  though  not  agreeing  to  deal 
exclusively  with  the  purchasing  agency,  w^ould  be  retarded 
from  dealing  with  others  by  the  liability  to  take  the  amount  of 
their  orders.  The  result  desired  might  then  be  accomplished 
without  a  violation  of  either  the  letter  or  the  spirit  of  the 
law. 

Syndicate  Buying 

Many  trade  associations  have  enabled  their  members  to 
secure  general  supplies  at  reduced  rates  through  this  system 
of  association  or  syndicate  buying.  The  Laundrymens 
National  Association,  for  example,  is  able  to  supply  its  mem- 
bers with  improved  office  machines  at  a  liberal  discount,  while 
the  American  Newspaper  Publishers  Association  offers  special 
inducements  whereby  typewriters  may  be  obtained  at  a  special 
price.  The  latter  organization  further  increases  the  usefulness 
and  value  of  the  plan  by  providing  that  a  portion  of  the  pur- 
chase price  may  be  paid  in  advertising. 

In  all  these  matters  of  collective  purchasing  or  price  in- 
formation regarding  materials  or  goods,  or  of  correcting  im- 
proper, unfair,  and  discriminatory  methods  of  selling  goods, 
an  association  must  act  with  discretion.  It  must  in  no  w^ay 
contravene  the  law.    It  must  not,  for  instance,  of  itself  restrain 


BRANCH   ASSOCIATIONS  173 

trade  by  refusing"  to  buy  goods  from  some  particular  concern 
because  it  does  not  approve  of  some  minor  practice  of  that 
concern  in  selling  goods. 

What  the  Association  Considers  Sound  Business 

Most  associations  in  insisting  upon  fair  purchasing  prices 
admit  readily  that  for  many  reasons  certain  buyers  are  entitled 
to  discounts.  They  realize  that  the  man  who  orders  in  large 
quantities,  who  pays  his  bills  promptly  and  meets  his  obliga- 
tions on  time,  is  entitled  to  a  reasonable  concession.  But  they 
strenuously  object  to  the  unfair  discrimination  and  unwar- 
ranted allowances  so  common  in  business.  They  argue  that 
apart  from  the  specially  justified  discounts  above  noted  an 
even  price  to  all  retailers  who  compete  for  the  trade  of  the 
same  customer  is  the  foundation  of  solid,  enduring  business. 

Many  of  the  great  business  handicaps  result  from  wide  and 
unfair  variations  in  the  terms  and  conditions  of  purchase. 
Quantity  discounts,  of  which  only  large  buyers  can  avail 
themselves,  enable  these  buyers  to  take  an  unfair  advantage 
of  their  smaller  competitors  by  buying  at  materially  low^er 
prices.  Members  of  associations  feel  that  since  these  buyers 
handle  only  a  small  percentage  of  the  total  business  they  should 
not  be  entitled  to  such  great  preference.  In  order  that  the 
great  majority  of  dealers  need  not  suffer  from  the  price  de- 
moralization caused  by  the  few  purchasers  who  are  offered 
such  favors,  associations  usually  advocate  the  allowance  of  a 
moderate  discount  on  a  quantity  not  too  large  to  prevent  small 
dealers  from  taking  advantage  of  it.  As  has  been  stated 
before  all  matters  relating  to  discounts  must  be  the  result  of 
individual  action  and  not  of  agreement. 

The  Attitude  of  One  Association  Toward  Discounts 

The  following  remarks  made  in  a  convention  address  will 
illustrate  the  attitude  of  one  association  in  this  connection: 


174  TRADE    ASSOCIATIONS 

Quantity  gets  the  price  just  as  surely  as  quality  brings 
the  price.  From  5  to  10  per  cent  is  legitimate  for  gross  over 
dozens,  thousands  over  hundreds,  but  w^hen  your  competitor 
is  enjoying  a  selected  trade  on  25  to  33  1/3  per  cent,  it  is 
well  to  take  an  inventory  of  conditions  and  see  if  by  some 
honest  demands  the  real  facts  cannot  be  placed  in  a  true 
light.  A  man  may  be  honest  in  buying  and  honest  in  the 
profits  on  his  capital  invested,  but  he  alw^ays  has  before  him 
that  old  slogan  "The  other  fellow^  is  a  better  buyer."  This 
arouses  in  him  the  old  cutthroat,  competitive,  antagonistic 
idea  and  does  not  make  for  his  own  success  or  for  that  of 
the  industry. 

Preferred  discounts,  rebates  to  special  classes  of  cus- 
tomers, the  "exchange  habit,"  the  free  deal,  and  the  premium 
game  are  a  few  of  the  many  current  trade  abuses  that 
associations  are  attempting  to  correct.  Most  of  these  prob- 
lems are  treated  in  the  same  manner.  First,  by  a  campaign 
of  education  the  various  factors  of  the  trade  are  acquainted 
with  the  approved  methods  of  merchandising  and  unfair 
practices  of  discounts,  with  a  view  to  showing  how  detri- 
mental and  undermining  they  are  to  the  foundations  of  good 
business.  The  most  progressive  concerns,  quick  to  appreciate 
the  fairness  of  the  association  plea,  are  not  long  in  abandon- 
ing these  disapproved  tactics. 

Members  are  then  urged  to  advise  the  association  imme- 
diately of  any  trade  irregularities  or  of  any  unfair  treatment 
on  the  part  of  manufacturers  and  wholesalers.  If  the  case 
is  at  all  deserving  of  attention,  the  association  makes  its 
appeal  directly  to  the  concern  in  question  and  often  this 
concern  is  made  to  see  the  injustice  of  its  methods.  But 
sometimes  the  concern  will  maintain  a  stubborn  attitude  and 
refuse  to  mend  its  ways.  In  such  cases  the  association 
resorts  to  a  campaign  of  publicity  in  order  to  bring  the 
particular  abuse  to  the  attention  of  the  trade  as  a  whole 
without  directly  referring  to  this  company  or  in  any  way 
establishing  a  black  list  or  libelous  attitude.  Years  ago,  of 
course,  such  a  campaign  really  amounted  to  blacklisting  and 
boycotting,  but  the  really  modera  trade  association  cannot 
legally  and  does  not  attempt  either  to  direct  or  to  withhold 
the  patronage  of  members,  but  by  keeping  the  trade  as  a 


BRANCH    ASSOCIATIONS  175 

whole  informed  as  regards  existing  conditions,  the  association 
believes  that  it  places  the  injuring  and  injured  parties  in 
question  in  a  better  position  to  decide  upon  future  courses. 

Export  Association 

Another  type  of  branch  association,  paralleHng  in  some 
respects  the  purchasing  association,  is  the  export  association. 
This  also,  while  organized  and  intimately  associated  with  the 
main  or  national  association,  should  be  operated  as  an  inde- 
pendent corporation.  It  should  be  under  the  direction  of  an 
export  manager  with  his  various  assistants  and  can  be  devel- 
oped in  much  the  same  way  as  any  regular  export  house. 
Several  export  associations  have  recently  been  formed  as  com- 
binations for  foreign  trade,  legalized  by  the  Webb  Act. 

The  American  Paper  Exports,  Inc.,  is  possibly  one  of  the 
best  examples  of  such  an  export  association  formed  by  a 
group  of  manufacturers.  Several  years  ago  the  United  States 
Paper  Export  Association  was  organized,  a  corporation  with 
regular  stockholders  composed  of  the  paper  manufacturers 
interesled.  Later  this  was  enlarged,  more  paper  manufacturers 
took  Suock,  and  the  name  was  changed  to  the  American  Paper 
Exports,  Inc. 

Not  all  members  of  the  general  trade  association  would 
be  expected  to  buy  stock  in  such  a  corporation,  but  those  who 
are  interested  may  do  so.  The  distribution  of  foreign  business 
is  left  to  the  discretion  of  the  manager  and  his  board  of 
directors.  One  thing  to  be  carefully  avoided  is  the  injection 
of  domestic  principles  and  practices  into  such  an  export 
association  or  organization,  since  these  are  seldom  applicable 
to  foreign  trade.     The  two  fields  should  be  kept  distinct. 

In  shipping  for  export  trade  a  number  of  export  associa- 
tions have  issued  specific  instructions  to  their  members  as  to 
exactly  how  their  products  should  be  packed  for  shipment  to 
foreign  ports.  A  large  proportion  of  American  goods  shipped 
abroad  in   former  years  were  rejected  because  of  improper 


176  TRADE   ASSOCIATIONS 

marking  or  of  packing  that  was  unsuitable  or  unable  to  stand 
the  various  vicissitudes  of  handling.  In  the  paper  industry 
the  matter  was  covered  by  means  of  a  booklet,  the  text  of 
which  is  here  reproduced.  The  general  principles  set  forth 
apply  to  almost  any  export  packing. 

Export  Packing 

In  shipments  to  overseas  countries  it  is  very  important  to  take 
into  consideration  the  freights,  especially  in  these  days  of  high 
freight  rates. 

It  is  equally  important  that  proper  protection  be  given  to  the 
paper  in  the  way  of  packing,  which  will  prevent  damage  to  the 
goods  by  bad  handling  at  loading  and  unloading  points. 

In  some  countries,  particularly  on  the  West  Coast  of  South 
America,  where  the  cargo  is  usually  lightered  from  the  steamer  to 
the  pier,  sometimes  under  very  rough  sea  conditions,  it  happens  that 
packages  are  broken  open  and  the  contents  seriously  damaged. 

For  any  but  the  better  grades  of  paper  an  export  bale  is  preferred 
to  a  case  as  the  bale  reduces  considerably  the  measurements,  there- 
fore reduces  the  marine  freight,  yet  protects  the  paper  sufficiently, 
especially  if  the  regulation  bale  is  adopted  and  carefully  made. 

In  some  countries  the  port  charges,  usually  very  high,  are  assessed 
on  the  gross  weight  of  the  shipping  package,  thus  favoring  European 
competition  where  baling  is  invariably  the  method  of  packing  adopted. 

While  hydraulic  baling  is  preferable  it  is  by  no  means  imperative ; 
as  a  matter  of  fact,  a  better  bale  is  often  made  as  a  jack  bale,  as 
mentioned  below,  by  the  ordinary  method  employed  in  some  mills, 
than  where  a  hydraulic  apparatus  is  used. 

The   specifications   for  the   standard   export  bale   are   as  follows : 

Unless  otherwise  instructed,  reams  are  to  be  placed  flat  in  bales. 
At  rare  intervals,  sheets  are  required  so  large  that  it  becomes  neces- 
sary to  have  each  ream  folded  once.  If  reams  are  folded  they  are 
to  be  placed  in  the  bale  with  folded  edges  alternating. 

If  order  calls  for  sheets  ream-wrapped,  each  ream  is  taken 
separately  and  entirely  wrapped  with  strong  paper  and  sealed  with 
sealing-wax  or  tape;  gummed  tape  is  preferred  because  it  leaves  no 
impression  in  the  better  papers,  such  as  M.  F.,  S.  C,  Writings  and 
Boards. 

For  each  bale  two  wooden  heads  are  provided.     These  heads  are 


BRANCH   ASSOCIATIONS  ^17 

preferably  constructed  as  follows:  Two  layers  of  ^"  lumber  nailed 
together,  the  boards  in  the  upper  layer  running  opposite  to  the  boards 
of  the  under  layer.  All  heads  are  one-quarter  inch  longer  and  wider 
than  the  size  of  sheets  to  be  baled.  (For  example:  For  sheets  cut 
24"X4o"  the  heads  should  measure  24>^"X4oM"-)  The  practice  obtain- 
ing in  some  mills  of  putting  heavy  wooden  cleats  on  single  boards 
at  the  top  and  bottom  should  be  substituted  by  the  above  method, 
inasmuch  as  the  steamship  companies  measure  to  the  extreme  dimen- 
sions of  a  bale  and  charge  accordingly — a  half-inch  addition  being 
counted  as  a  whole,  and  in  a  shipment  of  a  considerable  quantity 
making  quite  a  difference  in  the  freights  payable. 

The  regulation  or  standard  bale  is  500  lbs.  gross,  though  bales 
are  often  heavier  than  this.  Occasionally  smaller  size  bales  are 
specified  for  which  differentials  should  be  charged  to  cover  the 
additional  costs. 

The  process  of  making  the  bale  as  a  jack  bale  is  about  as  follows: 
Place  on  a  truck  about  three  feet  high  two  pieces  of  %"  band  iron, 
lengthwise  of  the  sheet.  Then  a  wooden  head  goes  on  above  the 
band  iron.  Next  two  sheets  of  heavy  screenings  or  strong  sulphite 
paper  are  laid  down,  same  being  of  sufficient  length  to  cover  one-half 
of  the  bale.  A  mill  doing  a  great  deal  of  baling  has  found  most 
efficient,  and  even  stronger  than  burlap,  which  is  often  used  instead 
of  pap-:/,  what  is  known  as  "Bull  Hide  Wrapper"  of  a  weight  of 
24X36 — 230  lbs. 

The  reams  are  then  piled  on  neatly  and  evenly ;  above  the  whole 
a  duplicate  of  the  bottom  equipment  is  placed — first  sulphite  wrappers 
and  finally  a  wooden  head.  Then  four  cross  strips  of  %"  .  .  . 
band  iron  are  laid  upon  the  wooden  head  and  the  pressure  is  applied 
— by  jack,  where  this  is  used,  or  by  hydraulic  press  where  available. 
Hydraulic  bales  are  built  in  the  press.  When  a  certain  pressure 
is  reached,  with  the  degree  of  which  the  finishers  will  soon  become 
familiar,  the  jack  or  press  is  stopped,  the  wrappers  are  neatly  folded 
in  and  fastened  strongly.  After  this  is  properly  done  the  cross-strips 
of  band  iron  (which  are  of  sufficient  length  to  reach  around  the 
bale  and  lap)  are  drawn  tight  and  buckled  with  one  inch  buckles 
or  seals  .  .  .  the  bands  running  lengthwise  are  then  tightened  and 
buckled.  If  buckles  are  used  a  piece  of  burlap  or  canvas  is  wound 
around  the  bands  at  the  buckles  to  form  a  protection  for  the  edges 
of  the  paper;  afterwards  the  pressure  is  relieved  and  the  bale  is 
complete.  .  .  .  Bulky  paper  can  be  baled  with   this  system  without 


178  TRADE  ASSOCIATIONS 


'  Bur-lop 


amunJiueykl 


BALED    FOR    EXPORT 


Mr^ 

-1 

1 

— ] 

'^^^^ 

5^ 

=1= 

Bale 
Gross 
Tare 
Net 

No.  12 

S70 

50 

520 

13  RMS 

26  ) 

:  40 

40/S00 

1 

1 

BRANCH   ASSOCIATIONS  179 

a  baling  press  of  any  kind,  but  care  should  be  taken  to  buy  the 
instrument  for  Ji"  iron  bands,  as  nothing  less  will  carry  safely  a 
standard  bale  of  500  lbs.  Some  mills  have  met  with  failure  in  trying 
this  system  with  %"  instruments.  .  .  . 

For  the  more  expensive  grade  of  paper  it  may  be  best  to  add 
burlap  to  the  baling  process. 

Association  of  Superintendents  or  Other  Officials 

In  a  large  national  organization  the  superintendents  of  the 
various  members  may  want  to  get  together  and  have  an  asso- 
ciation to  discuss  problems  of  mutual  interest  to  them,  just 
as  the  cost  men  or  the  salesmen  do. 

If  there  is  a  desire  for  such  an  association  on  the  part  of 
men  representing  any  particular  class  or  effort  in  the  industry 
it  should  most  certainly  be  encouraged,  because  if  the  associa- 
tion idea  is«good  for  the  executives  it  is  good  for  any  of  their 
employees.  An  interchange  of  ideas  and  a  discussion  of 
practices  is  a  good  thing  no  matter  whether  a  man  is  a  presi- 
dent, superintendent,  salesman,  or  cost  man,  or  whatever  his 
positi'^n  may  be  with  a  company.  But  one  word  of  warning 
from  the  experience  of  several  of  these  associations  might  be 
given  here. 

Caution  to  Branch  Associations 

Sometimes  these  branch  associations  in  their  enthusiasm 
forget  that  they  are  branch  associations  and  tliat  the  indi- 
viduals composing  them  are  primarily  employees  of  the 
companies  that  make  up  the  main  or  national  organization. 
The  branch  associations  are  merely  activities  under  the  direc- 
tion of  the  main  body.  The  larger  association  is  always 
willing  to  receive  suggestions  and  to  consider  their  fitness  for 
further  action  or  adoption.  But  it  is  not  wise  for  the  branch 
associations  to  try  to  dictate  to  the  national  association,  made 
up  of  the  executives,  as  to  what  ought  to  be  done.  This 
sometimes    occurs    with    associations    of    salesmen    or    other 


l8o  TRADE   ASSOCIATIONS 

officials.  In  organizing  these  branch  associations,  therefore,  it 
should  always  be  borne  in  mind  that  while  thorough  freedom 
of  action  is  desired  and  their  association  is  encouraged,  yet 
they  are  not  organized  for  the  purpose  of  running  the  industry. 
This  is  perhaps  particularly  true  of  the  salesmen's  associations. 

Technical  Associations 

The  above  rather  emphatic  statement  has  an  application 
also  to  certain  associations  of  technical  men,  which  have  been 
doing,  undoubtedly,  some  very  useful  work.  There  is  a 
feeling  on  the  part  of  some  technical  men  that  the  executives 
of  the  companies  by  whom  they  are  employed  are  unapprecia- 
tive  of  technical  effort  and  incapable  of  understanding  it. 

Not  long  ago  a  technical  association  was  formed  as  a 
part  of  a  national  organization.  In  a  short  while  the  chemists 
and  other  technical  members  of  this  association  began  to  think 
themselves — being,  in  the  majority,  men  with  technical  degrees 
— a  little  better  in  their  knowledge  of  the  technical  side  of  the 
industry  than  the  executives.  That  was  the  truth ;  but  it  did 
not  obviate  the  other  fact  that  they  were  still  employees.  It 
is  true  that  technical  men  more  and  more  are  becoming  heads 
of  large  industries;  but  not  all  technical  employees,  merely 
because  of  their  technical  knowledge,  are  qualified  to  consider 
themselves  as  advisers  to  the  executives  of  their  companies. 

These  particular  technical  men,  when  they  began  to  dictate 
to  the  general  association  what  should  be  done  and  what  should 
not  be  done  in  the  industry,  were  soon  told  by  the  executives 
through  the  parent  organization  exactly  where  they  stood. 
Their  advice  was  desired  and  the  fact  that  they  got  together 
to  hear  technical  papers,  and  to  interchange  ideas  as  regards 
the  technical  side  of  the  industry,  and  to  assist  in  standardizing 
and  improving  methods  of  manufacture,  was  most  acceptable; 
but  they  were  assured  that  they  were  by  no  means  the  flesh  and 
bone  of  the  industry. 


BRANCH    ASSOCIATIONS  lo^ 

Thereupon  these  technical  men  began  to  operate  their 
association  independently  of  the  parent  organization  and  to 
enlarge  their  membership  so  as  to  take  in  all  kinds  of  scientific 
men.  In  a  few  years,  rather  than  representing  any  particular 
industry,  it  simply  had  become  a  large  technical  society  for  the 
discussion  of  all  varieties  of  scientific  problems. 

This  example  is  given  to  show  how  sometimes  these 
branch  associations,  under  the  wrong  direction  and  with  the 
wrong  idea  as  to  their  relation  to  the  parent  organization,  can 
overstep  their  bounds  and  eventually  become  useless  to  the 
industry.  A  branch  association  should  always  be  joined  by 
the  right  kind  of  arrangement  to  the  parent  or  main  organiza- 
tion, should  be  made  to  feel  a  part  of  it,  should  be  given  direct 
service  by  it,  and  should  have  as  its  secretary  a  man  who  appre- 
ciates the  limits  of  the  branch  associations  with  which  he  is 
connected  and  who  is  willing  not  only  to  work  for  his  own 
particular  branch  association  but  for  the  parent  association  and 
the  industry  as  a  whole. 

]•  an  independent  or  contrary  attitude  is  assumed  by  a 
branch  association  the  executives  who  make  up  the  parent 
association,  and  actually  represent  the  industry,  become  dis- 
gusted with  the  branch  organization,  with  unfortunate  results. 
No  branch  association  can  reach  its  full  usefulness  that  is  not 
a  part  of  and  has  not  the  support  of  the  parent  association.  If 
the  head  or  executive  of  a  company  which  is  a  member  of  the 
parent  association  is  disgusted  with  the  actions  of  a  branch 
association  he  will  soon  make  sure  that  none  of  his  employees 
have  anything  to  do  with  it  and  that  no  payments  are  made 
to  it.  If  many  of  the  executives  feel  the  same  way,  the  branch 
association  necessarily  goes  out  of  existence  for  lack  of  mem- 
bers and  funds. 


CHAPTER  XIII 

A  COST  SYSTEM  FOR  AN  ASSOCIATION 

The  Initial  Desire 

To  establish  a  uniform  cost  system  for  an  association  it  is 
necessary  merely  for  some  of  the  members  to  want  such  a  sys- 
tem and  to  be  willing  to  pay  to  start  it.  For  all  members  at  first 
to  want  it  would  be  most  exceptional ;  some  have  to  be  educated 
in  order  to  appreciate  its  advantages,  and  these  generally  are 
the  ones  who  need  it  most. 

The  method  of  establishing  an  association  cost  system  to  be 
presented  in  this  chapter,  while  it  is  by  no  means  the  only  way, 
has  at  least  the  merit  of  having  been  tried  and  found  to  be 
successful  by  several  associations.  Of  course,  all  that  can  be 
given  here  will  be  a  few  suggestions  as  to  procedure  and  then 
an  idea  as  to  how  a  finished  report,  suitable  for  an  association, 
may  be  prepared. 

Committee  in  Charge 

When  a  sufficient  number  of  members  have  signified  their 
desire  to  attempt  the  establishment  of  a  cost  system  in  an 
industry,  a  committee  of  the  members  of  the  association  should 
be  appointed  to  direct  the  work.  It  is  to  be  hoped  that  some 
if  not  all  of  the  members  of  this  committee  will  know  some- 
thing about  the  principles  of  costs.  Although  interpretations 
of  methods  may  vary,  the  principles  or  fundamentals  of  costs 
are  always  the  same.  Any  good  book  on  costs,  in  which  the 
writer  is  not  endeavoring  too  much  to  impose  his  own  opinions, 
will  give  an  idea  of  the  principles  involved.  Often  in  an 
association  a  company  official  is  a  former  cost  accountant;  if 
so,  and  if  he  is  not  too  imperious,  self-sufficient,  and  obstinate, 

182 


A   COST    SYSTEM   FOR   AN   ASSOCIATION  183 

he  certainly  would  make  a  good  member  of  the  committee.  It 
seems  necessary  to  make  this  reservation  in  regard  to  former 
accountants,  as  unfortunately  a  number  of  committees  on 
which  cost  accountants  have  served  have  had  trouble  because 
of  their  unyielding  attitude  concerning  certain  interpretations 
of  cost  principles. 

Simplicity  the  Key 

The  committee  must  make  their  procedure  and  result 
simple.  That  is  the  key  to  the  success  of  any  association  cost 
report.  An  enthusiastic  cost  accountant,  when  talking  to  per- 
sons who  know  nothing  of  the  subject,  is  in  danger  of  be- 
clouding the  simple  fundamentals  of  costs  with  a  multitude  of 
details.  The  average  manufacturer  is  so  confused  after  listen- 
ing to  an  erudite  monologue  on  what  costs  will  do  and  what  is 
required  to  determine  them,  that  he  thinks  of  a  cost  system  as 
something  difficult  and  expensive,  both  to  instal  and  to  oper- 
ate.    In  consequence,  he  does  nothing  at  all  about  it. 

The  comments  here  made  are  not  written  in  criticism  of 
any  cost  man  or  public  accountant.  These  men  are  doing  a 
wonderful  and  a  vitally  necessary  work.  Inasmuch  as  they 
are  human,  however,  they  may  err  on  the  side  of  extreme 
technicality  in  their  presentation  of  their  subject  to  the  average 
manufacturer. 

One  objection  which  manufacturers  and  merchants  gen- 
erally raise  to  installing  a  uniform  cost  system  in  their  own 
plants  is  that  it  would  take  too  much  time  and  cost  too  much 
money.  They  have  been  led  to  believe  that  the  operation  of 
a  cost  system  requires  a  score  of  clerks  and  an  endless  number 
of  complicated  forms.     That  is,  they  are  simply  "scared  ofif." 

Results,  Not  Reports,  Desired 

One  is  reminded  of  the  manufacturer  who  several  years 
ago  had  one  of  these  so-called  efficiency  engineers  and  cost 


i«4  TRADE   ASSOCIATIONS 

experts  make  an  investigation  of  his  plants  and  issue  a  report 
as  to  their  condition,  with  recommendations  for  improvement 
by  means  of  a  system  of  costs.  When  the  report  was  handed 
to  the  manufacturer  he  studied  it  for  several  days  and  then 
sent  for  the  expert  saying,  "that  is  a  mighty  beautiful  piece  of 
typewriting,  but  where  on  earth  do  I  stand  and  what  do  you 
suggest  doing  about  it?"  The  expert,  of  course,  was  non- 
plussed and  chagrined,  as  he  considered  that  he  had  already 
stated  in  his  report  the  condition  of  the  man's  business  and 
recommendations  for  its  improvement.  So  he  had,  but  he 
had  done  it  in  such  a  way  that  only  a  "Philadelphia  lawyer" 
could  have  dug  out  his  meaning. 

Therefore  the  cost  committee  for  an  association  must  aim 
to  develop  at  first  a  simple  system  which  can  easily  be  under- 
stood by  the  members  and  as  easily  installed  in  every  business. 
Such  a  system  should  be  so  clear  and  elemental  as  to  take 
only  the  part-time  of  one  stenographer  or  one  clerk  according 
to  the  size  of  the  business.  It  should  be  made  to  fit  the  smallest 
plant.  A  cost  system  can  easily  be  expanded  to  fit  the  largest 
plant,  but  it  is  difficult  to  make  a  large-plant  system  fit  a  small 
plant  without  having  it  seem  cumbersome.  In  the  chapter  on 
association  departments,  the  operation  of  a  cost  association  for 
a  large  national  trade  association  composed  of  divisional  or- 
ganizations was  commented  upon,  while  in  this  chapter  only 
the  first  steps  of  a  cost  system  for  an  industry  are  discussed. 

Expanding  System 

As  stated  above,  once  the  cost  system  is  installed  and  its 
benefits  are  seen  it  can  easily  be  expanded  and  amplified  as 
desired.  The  officers  of  one  company  which  started  in  with  a 
simple  association  cost  system  were  not  in  the  least  enthusiastic 
about  it  at  first  but  thought  that  they  would  at  least  try  it  out. 
They  began  to  see  the  advantages,  and  in  less  than  six  months 
the  system  which  was  operated  originally  by  one  clerk  had 


A    COST    SYSTEM   FOR   AN   ASSOCIATION  185 

been  expanded  to  take  the  time  of  nine  clerks.  The  saving  to 
this  one  company  alone  made  the  cost  of  installation  and 
maintenance  of  its  system  less  than  a  small  fraction  of  i  per 
cent  of  the  sales.  The  management  readily  admitted  that  their 
sales  and  profits  have  appreciably  improved  since  they  have 
known  how  to  estimate  their  sales  prices. 

The  Man  in  Charge 

When  the  committee  has  finished  discussing  how  it  will 
proceed  and  has  determined  that  simplicity  will  be  the  key- 
note of  its  efforts  it  can  then  hire  a  cost  man  who  is  open  to 
conviction.  He  can  study  the  industry  and  do  all  the  detail 
work  for  the  committee.  It  is  sometimes  desirable  to  have  him 
go  from  one  plant  to  another  where  successful  cost  systems 
are  already  in  operation,  in  order  that  he  may  select  from  each 
system  the  best  way  to  handle  costs  as  applied  to  his  particular 
case.  If  the  committee  does  not  desire  to  retain  an  individual 
to  do  this  a  cost  firm  may  be  employed,  but  it  is  far  better  to 
have  one  man  do  the  work,  one  in  whom  all  have  confidence 
and  who  will  not  carry  from  one  mill  to  another  the  informa- 
tion he  may  find. 

The  Cost  Report 

The  committee  should  always  write  or  approve  the  report 
when  it  is  prepared  for  the  association  and  should  personally 
recommend  its  adoption  by  the  individual  members  of  the 
association.  The  report  will,  of  course,  include  the  specifica- 
tion and  recommendation  of  simple  cost  principles,  which  may 
be  called  a  system.  The  committee  will  have  to  spend  some 
time  in  arguing  with  some  of  the  members  who  are  hesitant 
about  the  plan.  In  preparing  the  report  all  technical  and 
elaborated  suggestions  should,  in  so  far  as  possible,  be  elim- 
inated, and  the  matter  should  be  presented  as  if  the  reader  were 
entirely  ignorant  of  cost  work. 


1 86  TRADE   ASSOCIATIONS 

When  the  report  is  presented  to  the  association  at  its 
meeting  it  will  help  to  have  large  wall  charts  giving  such  in- 
formation as  can  be  graphically  expressed. 

Expense 

To  return  to  the  question  of  expense.  At  first,  very  likely, 
the  plan  will  have  to  be  carried  by  a  few,  but  in  a  short  while 
every  member  will  want  to  participate,  not  only  in  the  cost 
system  but  in  the  expense  of  installation.  Associations  may 
hesitate  about  proceeding  in  this  matter  in  case  they  receive 
from  some  cost  firm  an  exorbitant  estimate  as  to  the  expense 
of  installation,  but  in  a  small  organization  a  system  can  readily 
be  installed,  as  above  suggested,  for  about  $5,000. 

Not  Uniform  Prices 

A  uniform  cost  system  for  an  association  does  not  mean 
uniform  costs  or  uniform  prices.  Costs  will  vary  as  the 
location  and  physical  equipment  of  plants  vary.  If  a  manu- 
facturer is  wise  or  fortunate  enough  to  locate  his  plant  where 
he  has  a  good  water-power,  thus  reducing  his  expense  for 
maintaining  steam-power,  he  certainly  is  entitled  to  that  saving 
in  his  costs.  So  it  is  with  all  items  of  cost  according  to  the 
equipment  or  location  of  the  plant.  Advantages  as  to  coal, 
labor,  freight,  nearness  to  raw  material,  etc.,  cause  a  variation 
in  costs  and  hence  a  variation  in  sales  prices. 

Some  persons  feel  that  the  only  way  to  correct  a  demoral- 
ized and  unprofitable  market  is  to  agree  on  prices.  That  is 
not  only  illegal  but  illogical.  It  is  placing  the  cart  before  the 
horse.  Prices  are  the  result ;  costs  are  the  cause.  If  costs  are 
right,  then  in  a  majority  of  cases  the  prices  are  right  when  they 
are  based  not  on  competition,  but  on  those  costs.  Destructive 
competition  is  due  not  only  to  a  lack  of  knowledge  of  general 
market  conditions,  that  is,  of  trade  information  which  an 
association  should  disseminate,  but  also  to  a  lack  of  knowledge 


A    COST    SYSTEM   FOR   AN    ASSOCIATION  1 87 

of  individual  manufacturing  costs.     Correct  costs  mean  fair 
competitive  prices. 

Costs  Basis  of  Competition 

"But,"  says  the  man  who  wants  to  agree  on  prices,  "if  there 
is  this  variation  in  costs  and  sales  prices  what  is  the  use  of  a 
uniform  cost  system?"  The  answer  is  that  fair  prices  and 
fair  open  competition  result  when  all  use  the  same  cost  system. 
It  is  the  best  kind  of  competition  to  compete  with  the  man  who 
knows  his  costs.  In  such  competition  there  is  nothing  which 
is  false;  everything  is  intelligent,  sound,  and  clear.  A  uniform 
cost  system  creates  a  sane  and  satisfactory  market  with  just 
enough  variation,  caused  by  the  individualities  of  human 
nature,  to  make  it  interesting.  If  members  of  an  industry  were 
half  as  much  interested  in  one  another's  costs  as  they  are  in 
one  another's  prices  the  market  would  be  greatly  benefited. 

A  Simple  Form  of  Cost  Record 

A  good  illustration  of  simple  methods  of  obtaining  costs 
is  that  used  by  an  association  of  tablet  manufacturers.  This 
method  consists  of  a  simple  estimate  sheet.  While  it  does 
not  by  any  means  constitute  a  complete  cost  system  it  is  a 
step  in  the  right  direction.  The  problem  that  confronted  the 
association  was  that  of  inducing  each  manufacturer  to  include 
in  his  estimates  all  necessary  items  of  cost.  After  an  investiga- 
tion of  the  industry  by  a  cost  accountant  it  was  found  that 
the  steps  were  very  simple.  The  cost  form  illustrated  in  Form 
8  was  recommended  by  the  committee  and  adopted  and  is  now 
in  use. 

When  an  association  has  to  face  all  the  complications  of 
manufacturing,  a  much  more  extensive  set  of  cost  records  be- 
comes necessary.  The  general  report  reprinted  below  shows 
how  such  problems  were  met  by  an  association  in  which  manu- 
facturing details  were  most  intricate,  and  how  a  system  of 


i88 


TRADE   ASSOCIATIONS 


STANDARD    COST   SHEET 

ESTIMATE                                                           NO.                                    DATE                                 112.... 

NAME                                                              size:               ruling             sheets 

PAPER                                                                                                 SIZE     &.     WEIGHT 

COVER 

SPECIAL 

FOR                                                                                                                    ESTIMATED     BY 

PRODUCTIVE     LABOR 

1 

MATERIALS  &  SUPPLIES 

QUAN 

WGT 

PRICE 

AMOUffT  1 

RULING 

PAPER 

PERFOSATINQ 

COVER    STOCK 

PRINTING     COVERS 

TOTAL  -  RULIMG    DEPARTMENT 

PRINTING     PAPER 

BOARD 

COUNTING 

BLOTTERS 

PUTTI^G     UP 

BLACK  LINES 

TIPPING 

STRIP 

FIRST     CUTTING 

CHEESE    CLOTH 

GLUEING 

GLUE 

SLICING 

WIRE 

STITCHING 

THREAD 

STAPLING 

LABELS 

FOLDING 

WRAPPERS 

PRESSING 

GLUE  OR  SEALING  TAPE 

STRIPPING 

SECOND     CUTTING 

PUNCHING 

ROUND    CORNERING 

INSPECTING 

TOTAL -WITHOUT  CASE 

WRAPPING 

WASTE     "^c 

LABELING 

CASE 

TOTAL- MATERIALS  a  SUPPLIES 

<=\l  IM 

M  ^ 

DV 

1 

TOTAL  -MATERIALS  &  SUPPLIES 

TOTAL      MAKING  DEPARTMENT 

TOTAL  -  PRODUCTIVE     LABOR 

TOTAL    PRODUCTIVE     LABOR 

TOTAL-  MANUFACTURING     BURDEN 

TOTAL  -  MANUFACTURING     COST 

MANUFACTURING     BURDEN 

FREIGHT   (on  «,^ of  co»«d  qoods) Il»ei.._ 

TOTAL     M'F'G    COST    plus    FREIGHT 

RULING .%  of    PROD.  LABOR 

MAKING .% 

CASH     DISCOUNT % 

STOCK      HANDLING Iks© 

SELLING    EXPENSE */. 

(inclixlu    Rccc.inq.Morog.,   Poclc.ng.  &  Shipp.n^) 

ADMINISTRATIVE     EXR *% 

PROFIT                         ,■% 

-% 

TOTAL                           % 

Divide  COST  PLUS  FREIGHT  by .<% 

TOTAL   MANUFACTURING   BURDEN 

SELLING     PRICE 

"   .,     ,.        -■         ■ ..,■■   •-,,   = 

Form  8.    Association  Cost  Sheet.     (Size  8^xioj4.) 


A    COST    SYSTEM   FOR   AN   ASSOCIATION  1^9 

cost  records  was  devised,  relatively  simple  in  form  and  definite 
in  presentation  of  fundamentals.  The  system  has  proved  most 
satisfactory,  and  has  served  as  a  model  for  many  others. 

General  Report^ 

Growing  Desire  for  Accurate  and  Uniform  Costs 

Conditions  surrounding  the  production  of  paper  are  somewhat 
more  complicated  than  in  many  other  lines  of  manufacture,  and 
for  this  reason  many  mills  have  in  the  past  failed  to  realize  the 
possibilities  in  the  use  of  accurate  and  uniform  costs.  Progressive 
manufacturers,  however,  today  realise  the  importance  of  and  the 
necessity  for  complete  cost  records,  and  your  committee  is  glad  to 
note  a  growing  desire  that  present  varying  methods  be  carefully 
considered  and  such  changes  as  seem  necessary  be  made  for  the 
sake  of  inestimable  advantages  to  be  gained  through  standardization 
and  uniformity.  As  paper  is  manufactured  under  widely  varying 
conditions,  it  is  obvious  that  no  one  rigid  system  will  adequately 
serve  all  mills;  but  it  is  possible  to  maintain  uniformity  in  principles 
and  general  methods,  although  details  must  necessarily  vary  zvith 
conditions. 

Results  Accomplished  in  Other  Lines  of  Industry 

At  this  point  your  committee  desires  to  call  to  the  attention  of 
the  Association  members,  the  beneficial  results  zvhich  have  already 
been  obtained  in  such  an  organization  as  the  United  Typothetae  of 
America.  The  Typothetae  Bulletin,  which  is  published  regularly, 
contains  reports  and  information  regarding  the  progress  of  their 
work  which  are  a  revelation  to  any  who  have  not  realized  the  great 
value  to  be  obtained  in  handling  costs  and  statistics  for  a  whole 
industry  on  a  uniform  basis;  and  all  members  should  obtain  and  read 
carefully  the  general  text  matter  in  the  Typothetae  pamphlet  entitled 
"Standard  Cost  Finding  System."  The  remarkable  results  obtained 
by  the  Typothetae  Association  through  their  uniform  cost  system, 
and  the  many  other  beneficial  influences  emanating  from  their  work, 
should  serve  as  an  inspiration  to  other  associations. 


*  Realizing  the  importance  of  uniform  terminology  in  cost  accounting,  this  report 
was  accompanied  with  explicit  definitions  of  the  terms  used  therein.  These  definitions 
are  reproduced  on  pages  201-204. 


190  TRADE   ASSOCIATIONS 

Possibilities 

It  should  be  remembered  that  the  benefits  to  be  derived  from 
a  properly  developed  cost  system  are  not  by  any  means  confined 
to  the  ability  to  determine  accurately  the  cost  of  the  product.  The 
additional  information  obtained  in  the  process  of  the  compilation 
of  cost  is  of  value  in  properly  solving  many  problems,  not  only 
in  manufacturing  and  selling  but  in  the  entire  conduct  of  the  business. 
It  has  been  proved  repeatedly  that  the  expense  incurred  in  compiling 
cost  data  has  been  the  wisest  kind  of  investment,  and  such  will 
be  the  experience  of  everyone  who  compiles  his  cost  figures  with 
the  serious  intention  of  getting  the  largest  possible  returns.  The 
value  of  these  returns  is  limited  only  by  the  degree  to  which  the 
cost  figures  are  wisely  carried  out  into  detail,  and  then  are  used  by 
the  management. 

Job  Method 

Where  manufacturing  necessitates  many  changes  because  of  short 
runs,  it  is  advisable  to  use  the  job  method  of  compiling  costs.  This 
method  calls  for  the  gathering  of  the  cost  data  on  individual  lots 
or  runs  of  varying  quantity,  each  entirely  independent  of  any  other. 
Only  in  this  manner  can  the  cost  of  any  particular  or  special  lot 
be  accurately  ascertained.  The  summarizing  of  the  individual  lot 
records  according  to  grades  or  other  desired  classifications  is  an 
ideal  method  for  obtaining  comparative  information  which  is  of 
inestimable  value  in  the  efficient  handling  of  the  business. 

Departmentalization 

In  order  to  gather  the  cost  data  with  the  greatest  degree  of 
simplicity  and  yet  present  it  in  the  clearest  manner  possible  it  is 
advisable  to  divide  the  plant  into  five  or  more  distinctive  departments, 
any  desired  number  being  developed  through  subdivisions  of  the 
main  departments.  Three  of  these  departments  cover  the  manu- 
facturing operations,  the  other  two  being  necessary  for  the  operation 
and  maintenance  of  the  plant  and  equipment.  The  three  main 
divisions  of  the  manufacturing  operations  are  the  material  prepara- 
tion, conversion,  and  finishing  departments.  The  others  are  the 
service  department,  which  includes  the  expenses  for  power,  steam, 
lighting,  etc.,  and  the  maintenance  department.  The  service  depart- 
ment charges,  after  being  assembled,  are  redistributed  to  the  other 
departments  according  to   the  services   rendered.     It   is   considered 


A   COST    SYSTEM   FOR   AN   ASSOCIATION  IQI 

inadvisable  for  most  mills  to  confine  themselves  to  the  broadly  classi- 
fied departmentalization,  but  a  more  detailed  classification  does  not 
seem  necessary  to  present  in  a  clear  manner  the  fundamental  prin- 
ciples and  methods. 

Control  of  Cost  Records 

To  be  thoroughly  dependable,  all  cost  records  should  be  controlled 
so  that  their  accuracy  may  continually  be  checked.  This  can  best 
be  done  through  a  set  of  double-entry  ledger  accounts  which  may 
be  as  extensive  as  desired.  The  importance  of  this  feature  of  a 
cost  system  cannot  be  exaggerated,  and  such  a  control  should  cover 
burden  charges  as  well  as  labor  and  inventory  records. 

Method  of  Control 

Materials  should  be  recorded  in  double-entry  ledger  accounts,  in 
as  much  detail  as  required,  by  charging  such  accounts  with  materials 
purchased  or  prepared  and  by  crediting  them  with  materials  used 
as  they  are  charged  to  the  product  at  the  point  where  they  are 
consumed.  These  material  accounts  may  be  carried  in  the  general 
ledger  but  it  is  preferable  to  handle  them  in  a  separate  ledger  con- 
trolled through  one  or  more  general  ledger  accounts.  Like  material 
accounts,  labor  accounts  may  also  be  carried  in  as  much  detail  as 
desired,  but  should  be  kept  in  control  with  actual  expenditures.  This 
can  easily  be  done  by  crediting  the  charges  against  all  labor  cost 
accounts  to  a  controlling  account  which  may  be  called  Wages  Accrued 
accounts,  the  debit  to  which  will  be  the  amount  of  pay-roll  checks 
as  entered  in  the  cash  book.  The  balance  remaining  in  the  Wages 
Accrued  account  will  represent  labor  expended  for  which  payment 
has  not  been  made. 

All  charges  for  burden  items  should  be  debited  to  burden  ledger 
accounts,  the  credits  to  which  will  be  the  distribution  of  the  burden 
to  other  burden  accounts  or  its  allocation  against  the  various  units 
of  production. 

Material 

Material  as  an  element  of  cost  is  sufficiently  familiar  to  pass 
without  detailed  explanation.  In  this  chapter  the  word  "material" 
will  be  considered  to  apply  to  such  material  as  can  be  allocated 
directly  against  some  definite  unit  of  production.     Indirect  material 


192  TRADE    ASSOCIATIONS 

which  cannot  be  so  applied  will  be  considered  as  supplies  and  handled 
as  a  burden  charge. 

Recording  of  Material 

Material  when  purchased  and  received  should  be  placed  on  record 
and  any  disposition  made  therefrom  should  be  recorded  and  charged 
directly  to  the  particular  unit  of  production  in  which  it  is  used, 
thus  establishing  a  continuous  record  of  material  on  hand  which 
should  agree  very  closely  with  physical  inventories  when  taken.  Such 
a  check  should  be  made  often  enough  to  assure  correct  inventory 
balances,  and  any  differences  discovered  should  be  adjusted  through 
an  inventory  adjustment  account.  Estimates  of  material  used  should 
be  avoided  as  far  as  possible,  as  it  is  a  comparatively  easy 
matter  to  obtain  accurate  records  of  the  consumption  of  most 
materials. 

Application  of  Material 

The  material  necessary  in  the  manufacture  of  the  finished  product 
may  be  of  two  kinds — purchased  raw  material,  and  prepared  material. 
Obviously  there  must  be  a  value  attached  to  the  prepared  material 
which  must  include  not  only  the  cost  of  the  raw  material  used  but 
also  the  expenses  incurred  during  its  preparation.  The  proper  value 
of  prepared  material  can  be  ascertained  only  through  compiling  its 
cost  by  the  same  method  as  used  in  figuring  the  cost  of  the  finished 
product. 

For  recording  the  quantity  of  raw  materials  used  in  manufacturing 
prepared  material  for  direct  consumption  during  the  conversion  of 
the  product,  two  methods  are  in  general  use.  By  one  of  these  methods 
the  raw  material  is  weighed,  counted,  or  measured  at  the  time  of  its 
use  and  a  record  made  of  the  quantity.  By  the  other  method  the 
weight  of  the  material  used  is  recorded  from  tags  attached  to  each 
unit  of  the  material  at  the  time  of  receipt. 

Whether  the  tag  system  is  used,  or  material  is  weighed  or  counted, 
it  is  a  comparatively  simple  matter  to  devise  forms  for  recording 
and  assembling  the  material  used  in  a  particular  run  so  that  the 
material  cost  may  be  ascertained.  Credit  should  be  taken  without 
fail  for  all  out-throws  of  value  before  making  the  material 
charge. 

In  the  manufacture  of  prepared  materials  the  raw  material  cost 
should  be  assembled  and  to  it  should  be  added  the  labor  and  burden 


A    COST   SYSTEM   FOR  AN  ASSOCIATION  193 

charges  incurred  during  the  process  of  preparation.  Forms  should 
be  devised  to  gather  the  correct  value  of  the  prepared  material 
ready  to  use  at  the  beater.  It  is  often  much  more  difhcult  to  determine 
the  dry  weight  of  the  prepared  material  as  it  is  used,  on  account 
of  the  large  losses  during  its  preparation. 

The  obsolete  method  of  charging  material  according  to  a  per- 
centage estimated  by  the  mill  superintendent  should  always  be  avoided. 
While,  over  a  long  period  of  time,  such  a  method  may  be  found 
to  give  a  close  check  with  materials  actually  used  according  to  the 
book  record,  it  will  also  be  found  that  the  material  charged  to  each 
individual  run  is  very  inaccurate. 

Labor 

Like  material,  there  are  two  classes  of  labor:  direct  labor,  which 
can  be  charged  against  some  definite  unit  of  production,  and  indirect 
labor,  which  cannot  be  so  applied  and  is  therefore  handled  as  a 
burden  charge. 

Recording  of  Labor 

Correct  records  of  direct  labor  expended  are  easily  obtainable 
through  proper  time  reports,  the  forms  for  which  any  accountant 
can  quickly  devise.  The  objection  is  sometimes  raised  that  employees 
have  no  time  to  make  records  of  performance,  and  that  time  taken 
to  make  accurate  records  will  reduce  the  quantity  of  production. 
It  is  often  inadvisable  to  require  records  from  each  individual  em- 
ployee unless  such  records  are  needed  to  give  accurate  information ; 
but  it  has  been  invariably  proved,  when  proper  thought  is  given  to 
the  preparation  of  the  forms  to  be  used,  that  no  reduction  in  individual 
efficiency  need  be  feared  but  rather  some  increase  may  be  looked 
for,  since  it  seems  to  be  true  that  an  employee  who  is  required  to 
make  a  report  of  accomplishment  is  sure  to  see  that  he  has  a  reason- 
able amount  of  accomplishment  to  report. 

It  is  sometimes  found  advisable  to  request  the  foreman  of  a 
department  to  report  the  time  of  a  group  of  employees  who  are 
working  on  the  same  unit  of  production  and  at  the  same  rate  of 
pay.  For  example,  in  some  material  preparation  processes  the  fore- 
man can  make  the  recording  of  labor  extremely  simple  by  entering 
on  a  form  the  nature  of  the  work,  the  number  of  men  working, 
and  the  time  they  worked.  The  exact  labor  charge  in  such  a  case 
becomes  a  simple  calculation. 


194  TRADE   ASSOCIATIONS 

Application  of  Labor 

Charges  against  units  of  production  for  labor  directly  expended 
during  the  manufacturing  processes  should  be  applied  at  the  actual 
rates  shown  by  the  pay-roll.  Averaging  different  rates  of  pay  in 
a  department  during  any  given  length  of  time  on  the  plea  of  sim- 
plicity should  be  consistently  avoided;  for  to  determine  such  average 
rates  either  delays  application  of  the  labor  to  the  cost  or  else  it 
necessitates  more  clerical  endeavor  than  would  the  making  of  direct 
charges  at  correct  rates  from  actual  individual  time  records. 

In  some  departments  it  may  be  advisable  to  apply  the  labor  charge 
as  a  departmental  labor  rate.  Such  a  labor  rate  can  be  combined 
with  the  departmental  burden  rate,  thus  very  much  simplifying  the 
detail  work.  The  value  of  this  method  is  evident  in  the  case  of 
a  machine  department  where  a  crew  of  a  certain  number  of  men 
is  constantly  required;  a  combined  rate  for  the  crew  can  be  used 
with  accuracy  although  individual  rates  within  the  crew  may  differ 
widely. 

Burden 

In  relation  to  mill  conditions  the  element  of  burden  is  best  handled 
in  two  main  divisions,  mill  burden  and  administrative  burden.  Mill 
burden  consists  of  items  directly  applicable  to  mill  operations,  while 
administrative  burden  consists  of  items  not  directly  connected  with 
the  mill  operations,  or  in  other  words  not  directly  under  the  control 
of  the  mill  superintendent.  Burden  charges  cannot  be  applied  to 
production  units  in  as  direct  a  manner  as  material  and  labor.  These 
charges,  while  just  as  important  a  part  of  the  cost,  are  more  general 
in  character.  They  should  be  carefully  analyzed  and  some  method 
should  be  devised  for  their  application  so  that  each  unit  of  production 
may  be  charged  with  its  proper  share  of  the  total. 

Hourly  Rate 

Of  the  several  methods  for  applying  burden  charges,  the  hourly 
rate  basis,  where  feasible,  provides  the  more  equitable  distribution. 

Fixed  Charges 

Among  the  most  important  burden  items  are  those  commonly 
called  "fixed  charges."  As  considered  in  this  report  fixed  charges 
are  made  up  of  the  following: 


A   COST    SYSTEM   FOR   AN   ASSOCIATION  195 

Interest  on  investment 
Taxes  on  property 
Insurance 
Depreciation 
Repairs 

Interest  on  Investment 

The  question  of  including  interest  on  capital  invested  as  an 
element  of  cost  has  been  the  subject  of  wide  discussion,  and  marked 
differences  of  opinion  still  exist.  The  inclusion  of  such  an  interest 
charge  is  useful  for  comparative  and  statistical  purposes,  and  this 
outweighs  all  arguments  for  its  omission.  Interest  should  therefore 
be  included  in  a  standard  cost  practice  as  it  will  prove  bene- 
ficial. 

Taxes  and  Insurance 

Taxes  and  insurance  are  somewhat  alike  in  their  relation  to 
cost,  and  their  inclusion  as  a  part  of  burden  is  a  generally  accepted 
procedure. 

Depreciation 

It  is  universally  admitted  that  depreciation  exists  in  any  manu- 
facturing plant,  and  therefore  its  inclusion  in  cost  should  be  con- 
sidered just  as  necessary  as  labor  or  material  charges.  The  dangerous 
practice  of  charging  off  depreciation  during  periods  of  prosperity  and 
omitting  such  a  charge  when  profits  are  not  so  large  is  never  a 
sound  business  policy,  and  is  now  so  obsolete  that  it  should  not  be 
considered.  The  most  correct  method  for  determination  of  the 
annual  depreciation  charge  is  to  deduct  the  estimated  scrap  value 
of  the  assets  from  the  appraisal  valuation  and  then  to  divide  the 
remainder  by  the  estimated  number  of  years  of  productive  use- 
fulness. 

Repairs 

Aside  from  the  depreciation  charges  there  is  a  continuous  expense 
for  maintenance  of  plant  and  equipment  termed  "repairs,"  which  is 
essential  for  the  efficient  operation  of  the  plant  and  which  in  many 
industries  assumes  such  large  proportions  that  it  is  an  extremely 
important  item  among  the  burden  charges. 


196  TRADE   ASSOCIATIONS 

Indirect  Labor  and  Supplies 

The  expenditures  for  indirect  labor  and  supplies  are  of  such  a 
nature  that  they  cannot  be  definitely  applied  to  particular  units  of 
production.  They  are  therefore  included  as  a  part  of  the  burden 
charges  but  should  be  kept  as  small  in  amount  as  possible.  All  items 
possible  of  application  as  direct  labor  or  material  should  be  so 
handled. 

Development  of  Departmental  Burden  Rates 

Where  no  figures  are  available  upon  which  the  fixed  charges 
can  be  based,  it  is  advisable  to  obtain  as  accurate  as  possible  an 
appraisal  of  the  normal  replacement  valuation  of  all  physical  assets, 
including  plant,  equipment,  and  inventories.  Such  a  valuation  should 
then  be  divided  over  at  least  the  five  general  departments — material 
preparation,  conversion,  finishing,  service,  and  maintenance — many 
subdivisions  of  each  department  often  being  necessary  or  advisable 
in  order  to  obtain  accurate  unit  costs  and  statistical  information. 
The  number  of  departments  decided  upon  does  not  in  any  manner, 
however,  affect  the  method  of  assembling  the  expense  charges,  as 
a  large  number  of  departments  merely  necessitates  a  further  division 
of  the  five  main  departments. 

In  determining  the  departmental  burden,  a  charge  should  be 
developed  covering  what  may  be  termed  "building  expense,"  which 
should  include  fixed  charges  on  building  and  fixtures,  and  such  other 
items  of  expense  as  would  ordinarily  be  included  in  a  rent  charge ; 
also  such  expense  as  is  necessary  for  watchmen,  cleaning,  etc.  The 
determination  of  such  a  building  expense  charge  can  be  accomplished 
very  easily  through  the  following  procedure : 

Upon  the  appraised  valuation  of  the  land  should  be  applied  a 
percentage  covering  the  interest  charge  for  one  year.  This  amount 
should  also  include  a  proper  proportion  of  the  taxes  applicable  to 
the  land  for  one  year.  To  the  sum  of  these  land  charges  should 
be  added  the  same  interest  percentage  upon  appraised  normal  replace- 
ment valuation  of  the  buildings  and  fixtures,  the  proper  share  of  the 
insurance  and  taxes  applicable  to  the  buildings  and  fixtures,  and 
also  a  fair  annual  allowance  for  depreciation  and  repairs  upon  the 
buildings  and  fixtures.  To  the  total  of  these  fixed  charges  should 
be  added  the  annual  expenditure  for  items  which  are  general  in 
their  nature  but  necessary  to  render  the  building  useful,  such  as 
watchman,  cleaning,  janitor  service,  etc. 


A   COST    SYSTEM    FOR   AN   ASSOCIATION  197 

This  annual  total  for  building  expense  should  then  be  distributed 
over  the  five  or  more  departments  in  one  of  two  ways,  either  accord- 
ing to  the  square  feet  of  floor  space  or  according  to  cubic  feet  of 
effective  space  occupied. 

The  building  expense  charge  having  been  so  obtained  and  dis- 
tributed to  each  department,  the  other  departmental  burden  items 
will  be  determined  in  each  department  as  follows : 

Fixed  charges  on  equipment  will  be  ascertained  in  the  same 
manner  as  outlined  for  building  and  fixtures.  The  best  estimate  for 
indirect  labor  and  supplies  that  can  be  obtained  from  previous  records 
will  then  be  added,  and  also  the  closest  possible  estimate  for  service 
charges.  These  service  charges  should  be  carefully  figured  after 
building  up  the  burden  charges  for  the  service  department  or  depart- 
ments and  adding  thereto  the  labor  employed,  thus  determining  the 
cost  of  power,  heat,  light,  etc.  Any  special  charges  peculiar  to  a 
particular  department  should  then  be  added  and  the  total  annual 
departmental  burden  obtained. 

In  order  to  establish  a  departmental  burden  rate  the  estimated 
total  annual  charge  for  burden  in  each  department  should  be  divided 
by  the  normal  annual  burden  units. 

Analysis  of  Burden  Cost 

The  importance  of  providing  an  adequate  analysis  of  burden  cost 
cannot  be  overestimated  and  the  accounting  procedure  should  include 
such  an  analysis  as  a  part  of  the  regular  routine.  To  accomplish 
this,  each  departmental  burden  account  can  easily  be  arranged  to  show 
the  expenditure  for  each  class  of  charges  in  direct  comparison  with 
estimates  and  previous  results ;  in  this  way  the  necessity  for  analysis 
after  the  close  of  the  books  may  be  eliminated. 

In  addition  to  providing  a  complete  analysis  of  departmental 
burden  cost  this  arrangement  of  the  burden  account  through  the 
routine  of  balancing  entries  brings  forcibly  to  the  attention  of  the 
cost  accountant  any  unusual  differences  between  the  estimates  and 
the  actual  charges.  To  determine  the  cause  for  any  such  unusual 
differences  an  investigation  should  immediately  be  initiated. 

If  a  change  in  operating  conditions  has  occurred,  or  if  expenses 
have  increased,  such  facts  are  immediately  presented  for  attention 
without  waiting  for  personal  checking  of  an  expense  analysis  by 
the  management.  Faulty  conditions  are  instantly  revealed  and  can 
more  quickly  be   remedied,  while  warranted  increases  in  manufac- 


198  TRADE   ASSOCIATIONS 

turing  expenses  can  promptly  be  carried  into  the  cost  of  the  product 
by  increasing  the  departmental  burden  rate.  Thus  invaluable  informa- 
tion becomes  quickly  available  for  the  promotion  of  greater  operating 
efficiency,  and  the  burden  accounts  periodically  record  the  progress 
in  each  department.  If  desired,  the  operations  of  each  department 
can  easily  be  charted  with  the  estimates  for  the  base  line,  the  actual 
entries  showing  the  variance  above  or  below. 

This  method  of  recording  the  burden  charges  should  be  given 
very  careful  consideration  as  burden  constitutes  one  of  the  most 
important  cost  items. 

All  differences  developing  in  the  burden  accounts  between  the 
estimates  and  current  entries  should  be  carried  to  the  Loss  and  Gain 
account  as  shown  later  in  the  Under-  and  Over-Earned  Burden  and 
Burden  Variance  accounts. 

Application  of  Administrative  Burden 

Certain  administrative  burden  charges  are  necessary  in  the  opera- 
tion of  a  manufacturing  enterprise  and  should  therefore  be  charged 
in  such  a  manner  as  to  become  a  part  of  the  manufactured  product 
inventory.  They  may  be  combined  with  all  departmental  burden 
rates,  but  are  more  easily  handled  in  one  charge  as  outlined  in  the 
following  paragraphs. 

The  development  of  a  rate  covering  the  administrative  burden 
items  is  a  very  simple  matter.  The  building  expense  chargeable 
to  the  office  and  the  fixed  charges  on  the  office  equipment  are 
ascertained  in  the  same  manner  as  explained  in  the  development  of 
the  departmental  burden  rates,  to  which  is  added  the  annual  estimate 
for  items  which  come  under  this  heading,  such  as  salaries,  office 
supplies,  postage,  etc.  No  charges  directly  connected  with  the  mill 
operations  or  under  the  control  of  the  mill  superintendent  should 
be  included  here. 

There  is  a  diversity  of  opinion  regarding  the  proper  point  where 
the  administrative  burden  should  be  applied  to  the  cost  of  the  product. 
It  is  the  opinion  of  some  that  this  charge  like  selling  expense  should 
be  made  after  the  mill  cost  has  been  compiled,  in  which  case  the 
administrative  burden  would  not  be  included  in  an  inventory  of  the 
product.  The  inclusion  of  the  administrative  burden  in  the  inventory 
is  proper,  and  this  charge  should  be  made  on  the  machine-hour  basis 
at  the  same  point  in  the  process  of  manufacture  where  the  conversion 
burden  is  applied.     For  example,  where  all  product  passes  through 


A   COST    SYSTEM   FOR   AN    ASSOCIATION  ^99 

one  principal  conversion  process,  this  process  offers  a  direct  arid 
simple  opportunity  for  application  of  the  administrative  burden  in 
one  rate;  in  this  way  a  distribution  over  all  departments  and  much 
extra  effort  in  establishing  and  changing  rates  are  avoided. 

Normal  Cost 

It  is  apparent  that  the  expenditures  for  many  of  the  burden  items 
vary  greatly  from  period  to  period.  This  is  due  to  a  variety  of 
causes;  and  if  selling  prices  are  to  be  based  upon  cost  figures,  it  is 
manifestly  impossible  to  vary  the  selling  prices  as  these  expenditures 
vary.  For  example,  no  grade  of  a  product  should  show  a  higher 
cost  for  burden  during  the  winter  months,  although  on  account  of 
weather  conditions  it  necessarily  costs  more  to  heat  the  plant.  This 
extra  expense  during  the  winter  should  be  spread  over  the  entire 
year.  Furthermore,  during  dull  periods  or  when  for  some  reason 
the  plant  is  not  operated  to  normal  capacity,  the  expenditures  for 
burden  items  remain  practically  normal  while  the  quantity  of  the 
product  is  materially  reduced;  but  it  is  manifestly  unfair  to  increase 
the  unit  cost  of  the  product  produced  during  such  periods.  This  loss 
from  slack  production  is  a  charge  to  Profit  and  Loss  and  not  a 
part  of  the  cost  of  the  product  actually  made.  The  adoption  of  the 
normal  cost  method  for  establishing  burden  rates  is  therefore  recom- 
mended. 

Selling  Expense 

Selling  expenses  are  incurred  only  in  disposing  of  the  manufac- 
tured product  and  should  therefore  never  be  included  in  the  inventory. 
Advertising  may  be  included  as  a  part  of  selling  expense,  or  may 
be  handled  separately  for  the  reason  that  in  some  cases  expenditures 
for  advertising  are  properly  treated  as  deferred  charges  over  more 
than  one  period.  These  expenses  may  be  included  in  the  determina- 
tion of  selling  prices  on  the  basis  of  perfect  product  sold  or  its  value. 
The  machine  hour  may  also  be  used  as  the  unit  of  application  with 
excellent  results  for  checking  and  comparison. 

Gain 

The  astounding  percentage  of  business  failures  clearly  shows  the 
necessity  for  establishing  selling  prices  which  not  only  cover  the 
complete  cost  of  doing  business,  but  also  include  sufficient  gain  to 


2O0  TRADE    ASSOCIATIONS 

enable  the  business  to  perpetuate  itself.  Manufacturing  enterprises 
can  be  permanently  successful  only  when  the  element  of  gain  is 
given  careful  consideration  before  selling  prices  are  established. 

Many  unwisely  consider  that  it  is  necessary  to  take  into  account 
only  an  amount  sufficient  to  cover  the  current  dividend  payments. 
This  may  furnish  a  reasonable  return  to  the  stockholders  when  manu- 
facturing conditions  and  sales  are  at  their  best,  but  it  is  courting 
disaster  to  assume  that  maximum  production  and  sales  will  continue 
indefinitely. 

It  is  necessary,  therefore,  when  making  quotations  to  include 
an  amount  of  gain  sufficient  to  insure  returns  which  will  be  large 
enough  to  assist  in  payment  of  dividends  during  periods  of  business 
depression. 

In  addition  to  the  payment  of  dividends  the  estimated  necessary 
gain  should  include  an  amount  sufficient  to  provide  for  a  consistent 
development  of  the  business.  This  is  a  fundamental  economic  prin- 
ciple upon  which  the  permanent  success  of  any  industry  must  be 
based.  This  principle  has  been  too  long  overlooked  by  some  manu- 
facturers to  the  detriment  of  some  entire  industries.  Progressive 
manufacturers  today,  however,  realize  its  importance  and  others  must 
do  the  same  if  they  are  to  survive  the  great  economic  readjustment 
of  the  present  chaotic  world  conditions  and  attain  future  success. 

The  adoption  by  all  members  of  an  association  of  a  uniform 
method  for  calculating  a  legitimate  gain  as  outlined  above,  which 
should  be  added  to  the  cost  when  determining  a  selling  price,  is  of 
only  slightly  less  importance  than  the  adoption  of  uniform  cost 
methods.  A  mill  being  a  manufacturing  plant,  the  gain  included 
in  the  selling  price  should  be  based  upon  the  manufacturing  opera- 
tions. Where  the  principal  manufacturing  operation  is  a  conversion 
process,  the  machine  productive  hour  offers  an  ideal  uniform  basis 
for  establishing  a  rate  per  hour  for  gain. 

It  must  be  remembered  that  the  actual  trading  loss  and  gain  and 
the  "legitimate  gain"  mentioned  above  are  two  distinct  subjects. 
Competition  and  market  conditions  may  result  in  a  larger  or  smaller 
profit  on  an  order  than  the  hour  rate  of  gain  would  indicate,  but 
this  rate  gives  a  sound  basis  upon  which  to  make  quotations. 

Establishment  of  Selling  Price 

For  the  establishment  of  a  selling  price  based  upon  cost,  there 
should  be  added  to  the  total  of  mill  cost,  selling  expense,  and  gain,  a 


A    COST    SYSTEM    FOR    AN    ASSOCIATION  201 

sufficient  allowance  for  freight  and  cartage  and  any  special  or  cash 
discounts. 

Periodical  Closing  of  Books 

The  books  should  be  closed,  accounts  verified,  and  financial  state- 
ments prepared  at  regular  intervals  during  the  year.  The  most 
intelligent  results  can  be  obtained  from  comparison  of  statistics  only 
when  these  intervals  are  of  equal  length.  Some  mills  consider  the 
division  of  the  year  into  thirteen  periods  of  four  weeks  each,  as  the 
most  satisfactory. 

Application  of  Principles  Above  Outlined 

The  report  then  gives  in  detail  various  tables  showing 
actual  operations  of  the  above  principles.  It  would  be  useless 
to  go  into  such  details  here ;  that  would  be  required  only  in  a 
book  on  cost  accounting  or  the  report  of  an  accountant  or 
committee  for  a  particular  industry.  The  application  of  the 
principles  above  outlined  will  vary  and  be  amplified  as  indus- 
tries vary,  although  the  general  method  of  procedure  for 
associations  installing  systems  is  the  same.  While  principles 
and  procedure  do  not  change,  their  applications  and  operations, 
whether  applied  to  a  particular  association  or  to  a  single  com- 
pany, are  bound  to  vary. 

Definitions  of  Cost  Terms 

Accurate  Cost.  Cost  properly  kept  in  accord  with  actual  expendi- 
ture. 

Administrative  Burden.  Burden  not  directly  connected  with  the 
mill  operations  and  not  under  the  control  of  the  mill  super- 
intendent. 

Building  Expense.  Rent,  or  burden  items  incurred  in  its  stead,  and 
•  such  other  expense  as  is  necessary  to  make  the  buildings  service- 
able for  continuous  use. 

Burden.  Manufacturing  expenses  which  are  of  such  a  general  nature 
that  they  cannot  be  applied  to  a  single  unit  of  production,  and 
which  are  often  given  the  more  common  title  of  "overhead 
charges." 


202  TRADE   ASSOCIATIONS 

Burden  Variance.  Difference  between  estimated  and  actual  ex- 
penditures for  burden  items. 

Control,  A  method  of  checking  the  correctness  of  material  quan- 
tities and  the  application  of  values  to  cost  through  the  medium 
of  double-entry  ledger  accounts. 

Conversion  Cost.  Cost  of  converting  the  raw  and  prepared  material 
into  rough  product. 

Department.  An  operating  division  of  the  plant  sufficiently  dis- 
tinctive from  any  other  to  make  desirable  the  separate  application 
of  its  operating  expenses. 

Departmental  Burden  Rate.  A  rate  developed  for  use  in  applying 
departmental  burden  charges. 

Departmental  Burden  Unit.  A  standard  of  time  or  material  for 
use  in  determining  a  departmental  burden  rate. 

Delivered  Cost.  Total  cost  of  the  product  delivered  at  the  door  of 
the  customer,  including  the  selling  expense,  freight,  and  the 
cartage. 

Direct  Labor.  Labor  which  can  be  applied  to  a  single  unit  of  pro- 
duction. 

Fixed  Charges.    Burden  items  which  are  fixed  or  constant  for  more 
than  one  operating  period,  as  follows: 
Interest  on  investment 
Taxes  on  property 
Insurance 
Depreciation 
Repairs 

Gain.  A  return  on  the  capital  invested,  in  addition  to  the  interest  on 
the  investment  which  should  always  be  added  to  the  cost  when 
determining  a  selling  price. 

Gross  Selling  Value.    The  total  value  invoiced  to  the  customer. 

Indirect  Labor.  Labor  of  a  general  nature  which  cannot  be  applied 
to  a  single  unit  of  production. 

Lot.  a  final  unit  of  production  which  will  retain  its  identity,  desig- 
nated by  a  lot  number. 

Machine  Hour.    An  hour  of  normal  machine  operating  time. 

Man  Hour.    A  productive  working  hour  of  an  individual  employee. 

Material.  Any  material  consumed,  either  raw  or  prepared,  which 
may  be  accurately  allocated  against  a  unit  of  production. 

Material  Cost.  Cost  of  raw  and  prepared  materials  as  applied  to 
the  product  in  process. 


A   COST   SYSTEM   FOR  AN  ASSOCIATION  203 

Material  Preparation  Cost.  Cost  of  changing  raw  material  into 
prepared  material  for  use  in  the  product. 

Mill  Burden.     Burden  directly  connected  with  the  mill  operations. 

Mill  Cost.  Cost  of  the  product  as  placed  in  the  car  or  on  the  mill 
platform  ready  for  shipment,  and  not  including  selling  expense. 

Net  Selling  Value.  Value  remaining  after  deducting  from  gross 
selling  value  any  freight,  cartage,  and  discount  allowed. 

Normal  Cost.  Cost  based  upon  normal  operating  time  and  average 
current  expenditure  for  burden  items. 

Overearned  Burden.  Difference  between  estimated  burden  and  the 
operating  credit  to  a  burden  account,  which  difference  represents 
the  number  of  departmental  burden  units  in  excess  of  the  esti- 
mate. 

Period.  One  of  several  equal  units  of  time  into  which  a  year  is 
divided  (for  example,  12  months  or  13  four-week  periods)  at 
the  end  of  which  time  the  profit  and  loss  is  determined. 

Prepared  Material.  Material  which  has  passed  through  some 
process  of  preparation  for  its  use  in  the  product. 

Prepared  Material  Cost.  Cost  of  the  raw*  material  used  in  the 
manufacture  of  prepared  material  plus  the  material  preparation 
cost. 

Productive  Hour.    An  hour  of  effective  operating  time. 

Rough  Cost.  Material  cost  plus  conversion  cost,  or  cost  of  the  con- 
verted product  before  the  finishing  cost  is  applied. 

Service  Charges.  Charges  to  other  departments  distributing  the 
operating  expenses  of  a  service  department. 

Service  Department.  A  department  not  directly  concerned  in  the 
actual  manufacturing  processes  but  necessary  to  keep  the  manu- 
facturing departments  in  operation. 

Supplies.  Such  miscellaneous  materials  as  cannot  be  applied  to  a 
single  unit  of  production. 

Underearned  Burden.  Difference  between  estimated  burden  and 
the  operating  credit  to  a  burden  account,  which  difference  repre- 
sents the  number  of  departmental  burden  units  below  the  esti- 
mate. 

Uniform  Cost.  Cost  derived  in  accordance  with  such  general  princi- 
ples and  by  such  methods  that  comparison  of  results  may  be 
intelligently  made. 

Unit  Cost.  Cost  of  a  single  unit  of  production  through  any  one  or 
more  processes  of  its  manufacture. 


204  TRADE   ASSOCIATIONS 

Unit  of  Production.  A  quantity  of  product  in  some  manner  dis- 
tinctive from  the  rest  of  the  product,  making  possible  the  deter- 
mination of  its  separate  cost.  (The  unit  quantity  may  vary  at 
different  stages  of  manufacture;  for  example,  a  run  of  20,000 
pounds  of  material  furnished  may  be  divided  into  many  units 
during  conversion.) 


CHAPTER  XIV 

THE  SECRETARY— QUALIFICATIONS 

The  Secretary,  and  Association  Success 

The  success  of  a  trade  association  depends  largely  upon 
selecting  the  right  man  for  secretary.  The  secretary  need  not 
be  a  "superman,"  but  he  must  have  a  distinct  talent  for  the  sort 
of  work  which  he  must  do.  He  must  be  able  to  work  efficiently 
himself  and  to  make  it  easy  for  other  men  to  work  well  to- 
gether. 

The  observations  and  suggestions  given  in  this  chapter  have 
grown  out  of  long  and  varied  contact  with  many  secretaries, 
and  also  out  of  their  own  statements  in  regard  to  the  qualifica- 
tions required  in  their  work  and  the  difficulties  they  must  over- 
come. The  specific  items  and  incidents  referred  to,  it  may  be 
added,  are  authentic ;  but  in  every  case  names,  places,  and  cir- 
cumstances have  been  altered. 

Personality 

A  secretary  should  be  distinctly  a  man's  man,  possessing 
such  an  appearance  and  with  such  manners  and  courtesy  as  will 
seem  natural,  unaffected,  and  genuine.  He  must  be  able  to 
meet  men,  both  individually  and  collectively,  and  discuss  with 
them  their  problems.  He  must  be  able  when  necessary  to  speak 
in  a  convincing  manner  to  an  audience  of  men.  He  must 
possess  above  all  that  subtle  quality  which  is  almost  impossible 
of  cultivation,  of  instilling  confidence  in  the  minds  of  other 
men  so  that  they  will  feel  that  he  is  one  to  whom  they  can  trust 
their  private  affairs  without  a  question  as  to  his  integrity  or  his 
sincerity.    All  this  requires  both  personality  and  ability. 

Personality  is  important,  but  it  has  its  limitations..    There 

205 


2o6  TRADE    ASSOCIATIONS 

was  a  secretary  of  a  small  trade  association  with  offices  in 
Chicago  who  was  without  doubt  one  of  the  most  charming 
men  that  anyone  would  care  to  meet;  but  his  personality  un- 
fortunately was  based  upon  such  an  exalted  opinion  of  himself 
that  he  was  unwilling  to  get  down  to  earth  and  work.  The 
members  of  the  association  after  a  while  got  tired  of  a  man 
whose  chief  value  was  as  an  amusement  artist,  and  although 
everybody  liked  him  and  there  was  nothing  specific  that  could 
be  said  against  him,  yet  he  did  not  make  a  success  of  his  posi- 
tion. 

Another  instance  is  that  of  the  secretary  of  a  certain  state 
association.  Everybody  liked  him  and  he  did  fairly  good 
work,  but  he  too  failed  to  make  a  desirable  executive  for  his 
organization.  This  man  had  plenty  of  industry  but  lacked  the 
ability  to  divide  essentials  from  non-essentials.  He  spent  so 
much  time  in  visiting  and  emphasized  so  much  the  social  side 
of  his  work  that  several  large  considerations  passed  without 
his  notice;  and  the  members  in  less  personal  and  more  sober 
moments  concluded  that  they  had  better  get  a  secretary  who 
was  a  business  man  and  not  a  social  lion. 

These  instances  illustrate  the  important  point  that  a  man 
may  have  personality  and  be  on  very  intimate  terms  with  his 
members  and  yet  not  be  a  satisfactory  secretary.  To  per- 
sonality must  be  added  ability  and  desire  to  work. 

Secretarial  Ability 

The  sort  of  ability  required  in  a  successful  secretary  is 
nothing  unusual  and  yet  it  seems  hard  to  define.  There  is 
many  a  successful  business  man  who  would  have  made  an 
excellent  secretary;  but  there  are  some  secretaries  who  would 
never  make  business  men,  and  their  impotent  associations  are 
the  best  proof  of  the  fact.  The  reason  that  not  all  secretaries 
nowadays  have  the  qualities  required  is  that  as  soon  as  one 
demonstrates  his  value  he  is  attracted — generally  by  the  offer 


THE   SECRETARY — QUALIFICATIONS  207 

of  a  large  salary — into  business.  It  is  a  misfortune  for  a  large 
trade  association  to  lose  its  secretary,  and  an  association,  if 
satisfied  with  its  secretary,  should  do  everything  possible  to 
retain  him. 

The  Relations  Between  Members  and  Secretaries 

Some  years  ago  the  secretary  of  a  prominent  association 
was  so  busy  running  the  association's  business  affairs  that  for 
a  year  or  two  he  had  no  time  to  devote  to  the  social  side  of  his 
work.  He  was  pleasant  enough  to  the  members,  but  he  simply 
did  not  have  an  opportunity  to  get  around  and  call  on  them 
and  to  be  on  as  intimate  terms  as  some  of  them  would  have 
liked.  Therefore  some  of  the  more  superficial  felt  that  they 
were  being  neglected ;  they  did  not  realize  the  real  work  which 
this  man  was  doing  and  consequently  so  irritated  him  with 
their  petty  criticisms  that.he  resigned.  Since  then  that  associa- 
tion has  had  seven  secretaries  in  seven  years  and  is  still  en- 
deavoring to  get  the  right  kind  of  man.  When  the  right 
secretary  is  finally  placed  in  that  position  he  will  be  a  man  who 
will  make  it  clear  to  the  members  that  there  can  be  no  repetition 
of  their  former  childish  attitude. 

It  is  amusing  to  note  that  the  association  under  discussion 
has  tried  a  number  of  times  to  get  its  original  secretary  back. 
The  members  missed  their  chance  once,  and  now  they  appar- 
ently have  difficulty  in  getting  a  man  who  will  be  satisfactory. 
It  is  well  for  an  association  to  be  just  as  careful  as  the  secre- 
tary himself  to  make  sure  that  the  relations  between  the 
secretary  and  members  are  always  pleasant. 

The  Professional  Secretary 

It  is  most  unfortunate  for  a  man  to  be  referred  to  as  a 
"professional  secretary,"  because  business  men  then  look  upon 
him  more  or  less  askance.  It  is  far  better  for  him  to  be  known 
as  a  business  man  serving  as  secretary ;  thereby  he  immediately 


2o8  TRADE    ASSOCIATIONS 

gets  out  of  the  professional  class,  and  men  think  of  him  as  one 
of  their  own  kind. 

It  is  for  this  reason  that  some  secretaries  are  called  "gen- 
eral managers"  or  "managing  directors."  In  fact  the  word 
"secretary"  is  rather  avoided  since  it  seems  to  suggest  a  person 
who  merely  keeps  minutes  and  writes  letters.  The  title  does 
not  make  the  man,  but  it  sometimes  enables  some  people  who 
are  not  familiar  with  his  particular  work,  to  have  a  higher 
regard  for  him.  It  is  a  general  rule  that  as  one  thinks  of  the 
secretary,  so  one  thinks  of  the  association. 

The  title,  however,  is  a  mere  matter  of  choice.  If,  as 
sometimes  is  the  case,  the  actual  secretary  is  called  a  manager, 
then  someone  else  is  given  the  title  of  secretary,  as  in  a  cor- 
poration, and  has  merely  to  go  through  the  form  of  keeping 
the  records. 

On  the  other  hand  when  we  consider  the  subject  more 
closely  we  must  admit  that  since  the  business  of  being  secretary 
now  calls  for  special  training  it  is  becoming  more  and  more 
of  a  profession.  This  is  a  good  tendency.  Successful 
secretaries  are  being  recognized  as  authorities  in  their  par- 
ticular field  and  as  a  result  are  being  compensated  sufHciently 
to  make  the  positions  more  attractive.  In  recent  years  changes 
among  the  leading  trade  secretaries  of  the  country  have  been 
comparatively  few. 

Sources  for  Secretaries 

Often  secretaries  or  members  of  associations  are  asked 
where  a  new  secretary  may  be  procured.  Such  a  question  is 
hard  to  answer.  No  association  wants  to  take  a  young  man 
who  has  just  come  from  college;  although  he  may  possess 
personality  and  latent  ability,  he  has  not  had  the  business 
experience.  On  the  other  hand,  not  many  associations  feel 
financially  able  to  bid  away  an  experienced  secretary  from 
another  association.     A  man  who  has  served  as  an  assistant 


THE    SECRETARY — QUALIFICATIONS  209 

under  an  able  secretary  elsewhere  is  desirable  and  frequently 
receives  chances  of  advancement. 

A  good  place  to  get  a  secretary  is  among  business  men,  pro- 
vided a  man  can  be  found  who  knows,  or  is  willing  to  learn 
quickly  what  an  association  can  and  cannot  do.  Most  business 
men  can  doubtless  find  among  their  own  acquaintances  men 
who  have  such  qualities  and  are  so  situated  that  they  would 
be  available  for  such  a  position, 

A  college  education  should  not  be  an  obstacle  to  the  selec- 
tion of  a  man  for  a  secretary's  position,  except  that  some  col- 
lege men  are  apt  to  be  a  little  too  theoretical.  Sometimes  they 
have  not  had  enough  business  experience  to  have  unlearned 
some  of  the  textbook  information  which  still  guides  their 
decisions.  By  this  it  is  not  meant  that  a  college  education  is  not 
desirable  on  the  part  of  the  secretary ;  merely  that  the  college 
man  must  also  be  a  practical  man  and  not  try  to  impose  his 
academic  information  upon  practical  business  opinions. 

The  Business  World  the  Best  Source  of  Secretaries 

And  so  it  might  be  suggested  that  the  best  place  to  find 
men  is  in  the  business  rather  than  in  the  academic  world.  It  is 
undeniable  that  various  schools  of  business  throughout  the 
country  furnish  excellent  educational  backgrounds  for  a 
secretary  as  well  as  for  a  business  man ;  but  it  is  impossible  for 
any  college  or  university,  or  school  of  business,  to  turn  out  a 
man  for  business  life  as  a  finished  product  in  his  particular 
line.  The  case  is  like  that  of  a  lawyer  or  a  doctor.  When  you 
employ  a  lawyer  or  a  doctor  for  an  important  matter,  you 
generally  want  one  who  has  had  at  least  ten  years'  practicing 
experience.  The  same  is  true  of  a  trade  association  secre- 
tary. 

If  possible,  it  is  desirable  for  a  trade  association  to  select 
a  man  from  within  its  own  industry.  But  there  is  a  danger  in 
this — that  the  association  may   select  a  man  against  whom 


210  TRADE   ASSOCIATIONS 

someone,  for  certain  reasons,  may  have  a  prejudice.  The  man 
may  not  be  known,  but  the  mere  fact  that  he  was  formerly 
employed  by  a  competitor  may  suggest  in  the  minds  of  some 
that  the  competitor  will  receive  favors  from  the  hands  of  the 
secretary.  One  may  feel  that  this  is  a  rather  narrow  point  of 
view  and  it  doubtless  is ;  but  it  must  not  be  overlooked  in  the 
selection  of  the  man.  If  there  is  no  one  within  the  industry 
available  then  a  secretary  can  be  selected  outside,  preferably  a 
man  who  is  a  stranger  to  everyone.  Thus  everyone  starts  even 
and  there  are  no  presumptive  favorites. 

An  Instance  of  Supposed  Favoritism 

A  man  was  selected  five  years  ago  as  secretary  of  a  large 
trade  association  primarily  through  the  influence  of  his  uncle, 
who  was  president  of  the  organization.  This  man  was  an 
excellent  secretary  in  every  way  but  the  uncle  did  not  have 
business  principles  which  were  altogether  acceptable  to  all  the 
members.  The  result  was  that  although  the  secretary  had  noth- 
ing to  do  with  the  individual  actions  of  his  uncle,  he  neverthe- 
less reflected  them  and  was  consequently  unfairly  suspected 
of  certain  matters  with  which  he  had  no  connection.  He 
finally  had  to  resign,  not  through  any  fault  of  his  own  but 
because  the  original  selection  of  this  secretary  for  that  place 
was  fundamentally  wrong.  It  is  human  nature  for  people  to 
think  that  those  who  are  related  in  a  family  will  be  prejudiced 
for  or  against  one  another  in  business  matters,  and  therefore 
relatives  or  intimate  friends  of  members  should  as  a  general 
thing  be  eliminated  from  consideration  as  association  secre- 
taries. 

Relation  of  Secretary  to  Members 

The  secretary  must  be  absolutely  impartial  in  his  relations , 
with  all  members  of  the  association.     Of  course,  as  time  goes 
on  there  naturally  will  be  some  towards  whom  he  may  feel  a 


THE    SECRETARY — QUALIFICATIONS  211 

little  more  friendly  than  towards  others,  but  as  far  as  business 
is  concerned  this  feeling  should  never  be  made  evident  by 
action  or  deed.  Not  that  there  is  any  personal  harm  in  such 
pleasant  relationships,  but  some  member  who  unfortunately 
may  not  possess  a  nature  which  makes  him  a  good  fellow,  or 
who  may  be  a  little  oversensitive  will  think  that  the  others  are 
receiving  too  many  favors.  Each  member  should  be  made  to 
feel  that  the  secretary  is  just  as  friendly  to  him  as  to  anyone 
else.  A  secretary  makes  a  fatal  mistake  if  he  allows  his  per- 
sonal preferences  and  friendships  to  interfere  with  an  im- 
partial performance  of  his  duties. 

At  the  time  of  a  meeting,  or  on  other  occasions  when  the 
members  are  all  together,  a  secretary  should  make  it  a  point 
to  be  especially  cordial  and  friendly  towards  the  "offish"  mem- 
bers. Those  who  are  his  friends  do  not  need  any  demonstra- 
tion of  his  feelings  towards  them,  whereas  the  others  do.  But 
he  should  by  no  means,  at  any  time,  assume  a  patronizing  air 
towards  any  member. 

Not  Too  Reserved 

The  secretary  of  one  important  national  association  is  in 
nearly  every  respect  highly  efficient,  but  he  has  failed  to  gain 
the  confidence  of  his  members  as  he  should  have  done  merely 
because  he  is  too  reserved.  They  think  that  he  takes  himself 
too  seriously.  He  has  been  rather  severely  criticized  for 
several  years  as  not  sufficiently  cordial  or  pleasant  at  time  of 
meetings,  or  in  fact  at  any  other  time  when  he  does  not  feel 
like  it.  This  secretary  may  be  constitutionally  unable  to  be 
other  than  he  is,  and  if  so,  he  is  most  unfortunate.  Of  course, 
at  the  time  of  meetings  a  secretary  naturally  is  preoccupied, 
but  that  should  never  interfere  with  his  being  cordial  when 
shaking  hands  with  anyone.  It  is  generally  the  secretary  of 
small  caliber  who  is  not  able  to  rise  above  such  occasions  and 
maintain  his  equanimity. 


212  TRADE    ASSOCIATIONS 

Not  Too  Gushing 

And  yet  a  secretary  must  not  appear  to  be  a  palaverer  or 
"glad-hand  artist,"  as  that  sort  of  thing  soon  sickens  the 
average  business  man.  The  secretary  should  not  be  so  reserved 
as  to  repel  the  warm  feelings  of  others,  but  neither  should  he 
seem  to  be  too  much  of  a  "hail-fellow-well-met." 

Once  in  a  while  a  secretary  is  found  who  goes  too  far  in 
his  geniality  so  that  some  of  the  association  members,  to  quote 
the  words  of  one  of  them,  "dread  to  go  to  a  meeting  and  have 
him  literally  fall  on  their  necks."  Geniality  carried  to  the 
point  of  gush  inevitably  stirs  the  suspicion  that  it  is  merely  a 
cloak  for  hypocrisy. 

The  Dangers  of  Talkativeness 

Just  as  a  secretary  must  avoid  being  too  friendly  to  certain 
members,  he  must  never  under  any  condition  whatsoever  dis- 
cuss one  member  with  another,  or  one  member's  plant  with 
another.  Even  if  the  discussion  is  favorable  it  should  be 
avoided.  For  example,  if  the  secretary  tells  one  member  some 
pleasant  confidential  things  about  another  member  the  first 
member,  if  he  is  at  all  wise,  may  say  to  himself,  "Well,  I  guess 
I'll  not  tell  this  secretary  anything;  he  may  go  and  tell  it  to 
somebody  else  just  as  he  is  telling  this  to  me."  Thus  the  secre- 
tary loses  the  confidence  and  sometimes  the  friendship  of  a 
man  who  otherwise  would  be  a  strong  and  loyal  member. 

Considerateness 

There  are  many  ways  in  which  a  secretary  can  do  pleasant 
little  personal  things  for  each  member  which  go  a  long  way 
towards  making  affairs  run  smoothly.  If  at  Christmas-time 
each  member  receives  a  personal  card  of  good  wishes  from 
the  secretary  it  is  always  appreciated;  and  if  the  secretary  has 
the  pleasure  of  meeting  any  one  of  a  member's  family  it  is 
always  a  good  thing  for  him  to  inquire  about  wife  or  son  or 


THE   SECRETARY — QUALIFICATIONS  213 

daughter  when  he  meets  that  member,  because  it  immediately 
places  the  secretary  and  the  member  in  a  pleasant  relation.  In 
some  associations  where  there  is  a  large  membership  the 
secretary  keeps  a  personal  card  for  each  member  bearing 
notations  regarding  the  member's  family,  and  when  the  oppor- 
tunity offers  itself  he  sends  a  word  of  congratulation  or  good 
cheer  to  the  member.  Especially  at  the  time  of  sorrow  a  man 
appreciates  a  word  of  condolence  from  the  secretary,  just  as  he 
appreciates  it  from  any  other  of  his  friends. 

One  could  go  on  enumerating  ways  in  which  the  secretary 
can  help  make  himself  well  liked  by  the  members  of  his  asso- 
ciation, without  going  too  far,  but  if  the  secretary  is  the  right 
kind  of  man  and  his  heart  is  in  the  right  place  the  occasion  will 
suggest  its  own  opportunity.  The  best  way  to  win  favor  is  to 
do  one's  work  well ;  that  the  members  appreciate  above  all  else. 

Relation  of  the  Secretary  to  the  Industry 

The  secretary  ought  to  be  posted  on  all  general  facts  in 
regard  to  his  industry  so  that  he  can  be  looked  upon  as  a 
reliable  source  of  information.  At  the  same  time  he  must  be 
careful  that  he  does  not  pose  as  an  authority,  because  it  is  most 
natural  for  some  member  who  has  been  in  the  industry  all  his 
life  to  ask  why  this  man  who  has  been  in  the  industry  for  a 
short  while  should  know  it  all  and  should  attempt  to  tell  him 
and  the  others  facts  about  things  with  which  they  are  familiar. 
A  member's  natural  pride  is  offended  by  a  secretary  who  poses 
as  a  "know-it-all"  on  subjects  relative  to  the  industry.  Here 
discretion  must  be  used. 

An  Authority,  Not  a  Dictator 

There  was  once  a  secretary  who  in  the  particular  industry 
which  he  served  was  an  authority.  But  unfortunately  for  him 
he  knew  it.  Nobody  was  blessed  with  as  much  knowledge  as 
he.     Nothing  could  ever  be  suggested  upon  which  he  was  not 


214  TRADE   ASSOCIATIONS 

in  possession  of  the  last  word — in  his  own  estimation.  Criti- 
cism rolled  off  of  him  without  any  effect;  he  was  so  supremely 
satisfied  with  himself  and  his  extensive  knowledge  that  he 
really  looked  with  pity  on  those  who  ventured  to  question  his 
word.  He  served  as  secretary  for  about  three  years  and  then 
his  members  suddenly  decided  that  it  was  really  unfair  to  him 
for  them  to  have  a  monopoly  on  his  knowledge.  They  sug- 
gested that  he  might  rather  impart  it  to  the  world  than  simply 
be  a  mentor  for  their  organization.  Two  years  ago  he  was 
elected  to  Congress. 

Members  want  a  secretary  to  be  a  leader  but  they  properly 
resent  what  seems  to  them  officiousness  and  dictation.  The 
wise  secretary  is  the  one  who  knows  his  business  but  keeps 
that  fact  at  all  times  in  the  background.  He  need  not  advertise 
how  much  he  knows  nor  apologize  for  how  little  he  knows; 
the  members  of  the  association  will  soon  find  it  out  without 
his  having  to  say  anything. 

The  Secretary  as  a  Trade  Adviser 

The  average  member  of  an  association  usually  is  not  in  a 
position  to  study  general  business  conditions  throughout  the 
country.  He  is  especially  concerned  with  the  immediate  prob- 
lems of  his  own  business  and  cannot  give  the  necessary  time  to 
the  study  of  economic  trends.  It  is  important  therefore  that 
the  secretary  should  be  the  student  for  the  members,  collec- 
tively, and  should  keep  them  informed  in  as  brief  and  as  direct 
a  manner  as  possible  of  the  tendencies  of  the  market,  giving 
them  all  such  general  information  as  they  can  use  in  con- 
ducting their  own  businesses.  He  becomes  as  it  were  the  watch- 
man on  the  tower,  who  sees  in  the  distance  the  indications  of 
danger  or  the  reassuring  signs  of  continued  peace  and  pros- 
perity. 

To  fill  this  capacity  properly  the  secretary  must  not  only 
be  a  man  mentally  capable  of  sifting  wheat  from  chaff  but  he 


THE    SECRETARY — QUALIFICATIONS  215 

must  do  a  great  deal  of  reading  and  studying.  Only  in  that 
way  can  he  give  the  members  the  right  kind  of  condensed  and 
nourishing  food  for  thought.  And  he  must  always  be  sure  of 
his  facts. 

The  Secretary  Should  be  a  Thinker 

The  secretary  personally  will  fare  a  great  deal  better  if  he 
says  little  and  thinks  much.  While  the  members  do  not  be- 
come enthusiastic  over  a  man  who  is  too  taciturn,  they  do 
resent  one  who  expresses  an  opinion  on  every  occasion.  It 
is  an  old  rule  that  a  man  ought  to  be  careful  about  expressing 
his  opinions  and  be  absolutely  certain  of  his  ground  before  he 
has  anything  to  say. 

Modesty  a  Secretarial  Asset 

Modesty  is  a  becoming  grace  in  a  secretary ;  it  will  never  of 
itself  be  a  cause  of  his  loss  of  appreciation. 

One  of  the  most  successful  secretaries  of  trade  organiza- 
tions in  this  country  was  such  a  modest  man  that  one  really 
had  to  meet  him  two  or  three  times  to  appreciate  his  worth. 
The  first  time  that  one  saw  him  he  gave  the  impression  of  being 
a  man  of  ability,  not  from  what  he  said  or  the  way  he  acted, 
but  just  from  the  way  he  looked;  and  as  one  came  to  know 
him  better  one  would  begin  to  realize  the  depth  of  his  quali- 
ties. 

His  case,  after  all,  is  the  case  of  all  really  great  and  able 
men.  He  did  not  have  to  tell  people  what  a  wonder  he  was ; 
he  let  time  and  results  speak  for  his  ability,  as  they  certainly 
did.  When  he  resigned  his  position  to  go  into  business 
every  one  of  his  members  sincerely  regretted  to  have 
him  make  the  change.  Each  one  admired  the  man  personally 
and  appreciated  what  he  had  done,  and  realized  that  his  service 
had  been  accomplished  in  the  most  quiet,  modest,  yet  effective 
way  possible  without  the  assistance  of  any  brass  band. 


2l6  TRADE   ASSOCIATIONS 

Unnecessary  Activities 

A  secretary  is  valuable  to  an  association  just  as  much  for 
what  he  does  not  do  as  for  what  he  does.  He  can  easily  waste 
the  time  and  money  of  an  organization  with  unnecessary 
activities.  He  should  be  able  to  discriminate  between  essentials 
and  non-essentials,  so  that  he  will  not  occupy  his  own  time,  or 
that  of  any  committee,  in  work  which  in  the  end  will  not 
amount  to  anything. 

There  is  at  present  a  well-meaning  secretary  of  a  trade 
association  who  is  a  perfect  pest.  Why  his  members  retain 
him  is  more  than  other  secretaries  can  understand.  While 
his  ability  is  apparently  good,  he  has  an  extraordinary  capacity 
for  pursuing  non-essentials.  Instead  of  building  up  his  organ- 
ization on  fundamentals  and  accomplishing  things  of  im- 
portance for  his  members,  he  is  spending  his  time  over  petty 
details.  It  has  often  been  remarked  that  the  results  of  his 
association  show  exactly  his  attitude  of  mind.  It  is  necessary 
for  a  secretary  to  think  in  a  large  way  and  to  do  the  things 
that  really  count — not  an  endless  number  of  unnecessary  things 
merely  for  the  sake  of  the  appearance  of  being  active,  like 
a  fluttering  hen. 

The  officers  and  the  committee  of  an  association  have  not 
the  time  to  keep  in  touch  with  all  details.  They  must  rely  on 
the  secretary's  judgment  as  to  what  should  be  done ;  he  should 
propose  new  activities  or  judge  whether  or  not  things  proposed 
by  others  are  adaptable  to  practical  application.  Woe  betide 
the  secretary  who  does  not  use  good  judgment  in  seeing  that 
the  association  gives  its  time  to  things  that  are  really  im- 
portant, and  that  inconsequential  things  are  set  side. 

New  Ideas 

If  at  any  time  a  secretary  has  a  new  idea  that  he  wishes 
to  present  to  the  members,  he  should  always  talk  it  over  first 
with  the  president  so  as  to  be  sure  that  his  proposition  is 


THE    SECRETARY — QUALIFICATIONS  217 

practical,  and  then  with  the  executive  committee  or  whatever 
committee  may  have  charge  of  the  particular  activity  con- 
cerned. If  the  suggestion  receives  the  indorsement  of  the 
president  or  the  committee,  it  will  always  be  accepted  much 
more  readily  by  the  membership  than  if  presented  by  the 
secretary  alone. 

Another  point  to  bear  in  mind  is  that  the  average  man 
will  always  work  twice  as  hard  for  some  idea  which  he  thinks 
he  originated  or  had  a  part  in  originating  than  he  will  for  one 
originated  by  someone  else. 

For  these  reasons  the  secretary  should  endeavor,  if  pos- 
sible, to  work  out  his  own  proposals  through  other  persons. 
In  this  way  he  stays  in  the  background,  yet  accomplishes  what 
is  desired.  Although  others  may  seem  to  get  the  credit,  it  will 
all  eventually  redound  to  the  benefit  first,  of  the  association, 
and  then  of  the  secretary,  if  for  his  own  modest  satisfaction 
he  wants  any  credit. 

Accepting  Suggestions 

One  member  of  a  certain  association  always  had  some  kind 
of  suggestion  to  offer.  It  would  have  taken  hot  only  the 
secretary's  time  but  that  of  three  or  four  assistants  as  well  to 
follow  everything  he  proposed.  The  secretary  patiently  noted 
all  these  proposals,  but  he  did  not  allow  himself  to  be 
overwhelmed.  In  the  course  of  five  years  that  member 
suggested  three  of  the  most  valuable  activities  which  the 
association  ever  undertook.  By  attention  and  wise  selection 
the  secretary  found  three  valuable  kernels  among  the  chaff. 

A  secretary  must  never  let  himself  be  stampeded.  Many 
a  time  a  member  will  come  forward  in  a  heated  and  excited 
manner  with  some  radical  suggestion  which  he  thinks  ought  to 
be  taken  up  right  away.  In  a  great  many  cases  the  thing  never 
should  be  touched.  The  secretary  must  give  earnest  attention 
to  what  the  member  has  to  say  and  make  it  clear  to  him  that 


2l8  TRADE   ASSOCIATIONS 

the  matter  will  be  given  full  consideration.  He  should  move, 
however,  only  with  precision  and  caution,  consulting  the 
president  or  the  necessary  committees,  and  then  not  proceeding 
unless  he  considers  the  matter  of  real  importance. 

The  Secretary  and  the  Critic 

Fortunate  is  that  association  which  possesses  among  its 
membership  a  constructive  critic !  The  destructive  crank  is 
much  to  be  condemned;  but  the  man  who  is  always  finding 
fault  until  things  are  done  in  the  right  way  is  greatly  to  be 
desired.  Those  members  who  always  acquiesce  and  say  how 
lovely  and  pleasant  everything  is  really  do  little  good  in 
advancing  and  perfecting  the  work  of  an  association.  When 
the  constructive  critic  lets  it  be  known  what  ought  to  be  done, 
he  may  be  disagreeable  personally  but  results  and  improve- 
ments are  bound  to  come.  The  process  is  not  always  pleasant, 
but  such  is  life.  The  best  things  in  this  world  generally  are 
created  by  hammering,  and  at  the  cost  of  stress  and  strain.  If, 
therefore,  there  are  one  or  two  members  of  an  association  who 
are  disposed  to  be  constructive  critics  of  this  sort,  they  should 
be  encouraged  by  all  means;  they  are  distinct  assets  to  the 
membership. 

The  Critic  an  Incentive  to  Better  Work 

A  secretary  once  related  to  the  author  his  experience  with  a 
critic  of  this  type.  This  man  always  took  the  opposite  side  when- 
ever any  argument  came  up.  He  was  most  critical  of  everything 
which  the  association  and  the  secretary  did.  He  became  so 
critical  at  last,  indeed,  that  he  broke  the  patience  of  the  secre- 
tary, who  asked  him  to  state  publicly  at  a  meeting  what  his 
objections  were.  It  came  out  all  right  eventually;  the  mem- 
bers found  in  course  of  time  that  the  criticisms  were  not 
borne  out  by  facts. 

The  point  that  the  secretary  wished  to  bring  out  in  relating 


THE    SECRETARY — QUALIFICATIONS  219 

this  matter  was  that  the  criticism  and  harassment  which  he 
received  from  this  member  were  the  cause  of  his  doing  better 
work,  because  he  was  determined  that  he  never  would  give 
his  critic  an  opportunity  to  find  anything  in  the  activities  of 
the  association  of  which  complaint  could  justly  be  made.  The 
critical  member,  irritating  as  he  was  at  the  time,  served  as  a 
blessing,  because  in  reality  he  helped  to  produce  a  higher  quality 
of  efficiency  on  the  part  of  both  the  association  and  the  secre- 
tary. 

It  is  a  tremendously  good  thing  for  any  secretary  or  any 
man  to  know  that  there  is  some  keen  person  always  checking 
up  his  work  and  ready  to  criticize  him  and  the  association  for 
things  w^hich  are  not  done  right.  If  he  is  any  kind  of  a  secre- 
tary at  all  he  will  never  let  this  critic  get  the  best  of  him  or 
the  association,  and  the  result  will  be  that  perfect  work  will  be 
done.  Nine  times  out  of  ten  the  critic  will  prove  in  the  end 
to  be  one  of  the  strongest  supporters  of  the  association.  In 
many  an  association  men  who  might  at  first  thought  be  set 
down  as  cantankerous  and  even  hostile  are  actually  its  most 
loyal  members  and  will  fight  for  its  principles. 

Aside  from  what  has  been  said,  a  man  of  critical  temper 
is  nearly  always  a  valuable  member  of  a  committee  because 
he  stirs  up  argument  and  develops  points  which  will  in  the  end 
make  for  judgments  that  are  sounder  and  more  solidly  based. 
Some  men  are  chronic  seconders  of  motions  without  ever 
giving  the  motion  any  thought  in  itself ;  but  the  man  who  will 
not  vote  until  he  is  convinced  that  he  is  right  is  the  man  who  is 
most  valuable  on  a  committee. 

Some  critics  of  course  are  just  constant  cranks,  and  then 
an  unfortunate  relationship  is  created,  not  only  between  the 
secretary  and  such  a  member  but  between  that  member  and  all 
the  other  members.  But  in  time  such  an  obstructionist  and 
irreconcilable  is  eliminated,  either  by  the  "freezing  out"  process 
or  through  an  act  of  Providence — although  doubtless  before 


220  TRADE   ASSOCIATIONS 

that  there  is  many  a  member  or  secretary  who  would  like  to 
assist  nature  in  her  work  of  extermination. 

The  Secretary  in  Difficult  Situations 

A  secretary  will  sometimes  find  himself  in  difficult  situa- 
tions where  there  are  several  factions  at  loggerheads  over  some 
proposition;  where  he  must  act  as  a  diplomatic  mediator  in 
bringing  about  proper  feelings ;  where  he  must  first  get  results, 
and  then  ameliorate  any  temporary  harm  which  has  been  done. 

Just  as  a  secretary  must  not  have  favorites  among  mem- 
bers, so  he  must  never  take  the  side  of  any  group  in  an  argu- 
ment, but  rather  let  the  members  settle  the  thing  themselves. 
Such  discretionary  suggestions  and  steering  as  he  may  offer 
must  be  given  obviously  in  the  interest  of  harmony.  In  all 
this  the  secretary  must  use  good  judgment.  It  is  no  easy 
matter  to  weigh  issues  carefully  and  impartially  and  to  do  the 
right  thing  in  a  crisis. 

One  of  the  most  important  duties  of  a  secretary — consti- 
tuting, one  might  say  about  three-quarters  of  his  value — is 
that  of  keeping  the  members  all  feeling  right  towards  one 
another.  When  one  member  makes  a  statement  about  another 
member  the  secretary  must  be  careful  not  to  agree  with  him, 
but  to  make  a  mental  note  of  that  statement,  to  find  out  if  the 
facts  are  as  stated,  and  then  if  they  are  not,  to  go  back  and 
correct  the  speaker's  misapprehension. 

Family  Rows 

There  is  many  a  secretary  who  could  relate  his  experience 
in  straightening  out  some  "family  row."  One  instance 
occurred  in  a  national  association  which  represented  a  food 
industry.  A  producer  in  the  West  had  a  salesman  who  came 
east  and  who  thought  that  he  discovered  certain  conditions 
about  the  members  in  the  East  which  were  inimical  to  the 
interests  of  the  western  members.    He  let  this  matter  grow  in 


THE    SECRETARY — QUALIFICATIONS  221 

his  mind,  and  when  he  went  to  Chicago  he  told  his  employer 
a  story  which  was  more  fiction  than  fact.  The  employer 
believed  him  and  told  it  as  a  fact  to  other  producers  further 
west,  with  the  result  that  the  first  thing  the  secretary  knew  he 
had  a  divisional  contest  on  between  his  members  in  the  East 
and  his  members  in  the  West.  By  making  some  careful  in- 
quiries he  found  out  where  this  information  originated  and 
went  to  the  member  in  Chicago  and  had  a  frank  talk  with  him. 
He  discovered  that  the  source  of  this  member's  information 
was  the  salesman.  Further  investigation  showed  that  the 
entire  controversy  had  arisen  through  a  misstatement  of  facts 
plus  a  vivid  imagination  on  the  part  of  the  salesman. 

If  the  secretary  had  not  undertaken  actively  to  correct  that 
situation  a  serious  condition  would  have  arisen  in  the  industry, 
doubtless  resulting  in  all  kinds  of  malpractice,  a  retaliatory 
price  war,  and  other  things  which  would  have  been  detrimental 
not  only  to  the  members  but  to  all  who  bought  the  product.  It 
would  have  set  going  a  campaign  of  destructive  competition. 

Keeping  Up  Association  Spirit 

Rumor,  gossip,  and  misinformation  generally  play  a  large 
part  in  stirring  up  ill  feeling  among  members  which  may  lead 
to  disastrous  results.  It  must  be  the  secretary's  duty  to  kill 
the  trouble  at  the  start,  to  forestall  the  destructive  tendencies 
by  quietly  and  effectively  instilling  the  disposition  for  harmony 
in  the  mind  of  each  member.  The  secretary  should  be  a  con- 
stant harbinger  of  truth. 

Any  secretary  of  several  years'  experience  will  bear  witness 
that  practically  all  the  allegations  which  are  brought  up  by  one 
member  against  another  are  absolutely  groundless  when  you 
get  down  to  the  real  facts.  Allegations  are  generally  the 
result  of  a  story  being  told  about  the  actions  of  some  member 
which  finally  gets  back  to  the  competitor  affected  in  such  a  way 
as  to  seem  almost  a  heinous  crime.    Then  it  is  that  the  secre- 


222  TRADE    ASSOCIATIONS 

tary  must  step  in.  If  necessary  he  must  bring  the  two  members 
together  and  see  that  their  differences  are  cleared.  A  frank 
talk  will  clear  almost  every  situation.  Such  a  policy  steadily 
pursued  will  develop  a  splendid  spirit  among  the  members,  pro- 
duce a  loyal  membership  and  a  solidly  effective  association. 

The  Character  of  the  Secretary 

Before  we  leave  this  consideration  of  the  qualities  of  the 
secretary  and  the  relation  between  the  secretary  and  the  mem- 
bers, there  is  one  statement  that  must  be  made — although  it 
might  seem  unnecessary — and  that  is  that  the  last  place  on 
earth  for  a  crank,  or  an  egotist,  or  a  bigot,  or  a  religious  or 
social  fanatic,  is  in  the  position  of  secretary  of  a  trade  associa- 
tion. Many  a  good  secretary  has  been  spoiled  by  his  being 
"twisted"  on  one  or  two  subjects. 

One  of  the  best  trade  association  secretaries  in  this  country, 
by  becoming  obsessed  with  the  impractical  principles  of  social- 
ism, made  himself  an  impossible  executive  for  the  organization 
which  he  represented.  This  was  most  unfortunate,  because 
otherwise  the  man  was  valuable;  but  his  ideas  of  social 
democracy  and  the  brotherhood  of  man  were  a  little  too  strong 
for  the  organization  which  he  served.  He  therefore  has  since 
resigned  and  gone  into  newspaper  work. 

A  secretary  must  be  a  man  of  positive,  clear-cut  thought 
and  conviction,  but  must  not  be  one  who  is  flying  off  at  tan- 
gents, or  given  over  in  the  least  to  erratic  views. 

R.  S.  Kellogg,  secretary  of  the  News  Print  Service  Bureau, 
formerly  for  five  years  secretary  of  the  Northern  Hemlock 
and  Hardwood  Manufacturers  Association,  followed  by  three 
years  as  secretary  of  the  National  Lumber  Manufacturers 
Association,  therefore  a  man  of  thorough  experience,  in  an 
address  before  the  Chicago  Forum  of  trade  association 
executives  presented  most  ably  the  relations  between  a  secre- 
tary and  his  officers  and  members  as  follows : 


THE    SECRETARY — QUALIFICATIONS  ^^Z 

The  history  of  trade  associations  throughout  the  country 
shows  that  these  organizations  have  been  successful  and 
attained  their  purposes  just  to  the  extent  that  they  have  fol- 
lowed a  consistent  course  of  employing  a  competent  executive 
officer  and  giving  him  a  free  hand  in  the  carrying  out  of  the 
general  policies  favored  by  the  members,  without  petty  super- 
vision and  restriction  as  to  details.  Aside  from  the  executive 
officer  who  is  called,  "secretary,"  "manager,"  or  some  other 
appropriate  title,  and  who  should  never  have  any  personal 
interest  in  the  line  of  business  represented,  the  other  officers 
and  directors  of  a  trade  association  are  active  business  men 
with  many  demands  upon  their  time. 

The  secretary,  or  manager,  is  the  man  to  whom  the  rank 
and  file  of  the  membership  look  for  the  carrying  out  of 
association  policies  without  favoritism  and  with  no  personal 
stake  in  the  undertaking  save  the  desire  to  do  his  duty  hon- 
estly and  fearlessly.  Absolute  neutrality  of  management  is 
a  first  requisite.  If  an  individual,  representing  some  par- 
ticular section  of  the  industry,  attempts  to  dictate  as  to  the 
details  of  administration,  distrust  inevitably  arises  and  the 
usefulness  of  the  organization  is  imperiled.  No  individual 
member  of  the  organization,  actively  engaged  in  business  on 
his  own  account,  can  attempt  to  manage  the  organization 
during  a  temporary  occupancy  of  office  with  satisfaction 
either  to  himself  or  to  the  membership.  Despite  the  best 
of  intentions,  suspicion  and  jealousy  will  arise,  followed 
either  by  the  dissolution  of  the  organization  or  the  nullifica- 
tion of  its  efforts.  It  is  not  necessary  to  list  the  well-known 
cases  in  which  the  domination  of  a  trade  organization  by  a 
single  individual  or  interest  within  it  has  had  exactly  this 
result.  Nothing  else  can  be  expected  if  every  change  in  the 
titular  head  of  the  organization,  which  occurs  frequently, 
really  means  a  new  executive  and  a  new  method  of  doing 
business.  This  is  the  point  where  the  supposed  analogy 
between  a  corporation  and  a  trade  organization  falls  down. 
The  secretary,  or  manager,  should  be  the  permanent  execu- 
tive officer  who  keeps  the  machine  running  and  who  main- 
tains the  continuity  of  effort  essential  to  the  accomplishment 
of  the  purposes  of  the  organization  as  expressed  by  the 
membership  and  its  board  of  directors. 


CHAPTER  XV 
THE  SECRETARY— PROCEDURE 

The  Valuable  Secretary 

The  successful  and  valuable  secretary  is  the  man  who  is 
able  so  to  systematize  his  work  that  he  is  free  to  place  at  the 
disposal  of  his  members  his  best  thought  and  service.  The 
man  who  can  do  this  is  the  man  who  knows  intimately  not  only 
his  own  work,  but  the  work  of  every  employee  under  him.  It 
is  not  meant  by  this  that  a  secretary  should  concern  himself 
with  clerical  work.  Neither,  however,  should  he  consider  his 
position  so  exalted  that  he  is  above  detail;  quite  the  reverse, 
he  must  familiarize  himself  by  actual  contact  and  make 
special  effort  to  keep  in  constant  touch  with  every  detail  of  the 
association. 

Before  the  secretary  can  tell  one  of  his  subordinates  to  do 
something  he  must  be  able  to  do  it  himself,  and  consequently, 
if  he  is  to  be  able  to  devote  his  best  efforts  to  things  of  moment, 
he  must  build  for  his  office  organization  a  practical  system 
which  he  can  direct. 

How  these  practical  systems  for  office  organizations  can 
be  built,  or  suggestions  as  to  how  they  may  be  built,  is  one 
of  the  most  important  things  to  be  considered. 

Office  Enthusiasm 

One  of  the  first  essentials  if  the  secretary  is  to  have  an 
efficient,  smooth-working  organization,  is  enthusiasm  among 
his  assistants.  Every  one  of  them  should  take  a  lively  interest 
in  his  or  her  task,  for  the  sake  of  the  task  itself  and  because 
it  is  worth  doing;  not  merely  because  it  means  a  steady  job. 
Employees   should    feel   that  they  are   integral  parts  of  the 

224 


THE  SECRETARY — PROCEDURE  225 

association  and  that  its  interest  and  welfare  are  their  interest 
and  welfare. 

To  insure  such  a  condition  the  secretary  will  find  it  neces- 
sary to  employ  clerks  and  stenographers  above  the  average  in 
intelligence  and  ability,  because  the  work  to  be  done  requires 
a  great  deal  of  care  and  genuine  constructive  thinking.  Most 
trade  associations,  especially  in  their  statistical  work,  employ 
college  graduates  because  the  work  requires  special  training. 

Office  Suggestion — The  Office  Manager 

If  the  association  is  large  enough  it  should  have  besides 
the  secretary  an  office  manager  or  assistant  secretary,  prefer- 
ably the  former,  who  should  be  in  charge  of  affairs  during  the 
secretary's  absence  and  can  thus  relieve  him  of  unnecessary 
detail.  As  a  rule,  assistant  secretaries  should  be  avoided,  at 
least  so  far  as  the  title  is  concerned,  because  the  members 
resent  receiving  attention  from  anyone  but  the  secretary  him- 
self. This  may  seem  strange,  but  it  is  a  fact.  The  office  itself 
can  then  be  subdivided  into  the  statistical,  research,  credit,  and 
stenographic  branches,  with  someone  at  the  head  of  each, 
provided,  of  course,  the  association  is  large  enough  to  warrant 
an  arrangement  of  this  kind.  The  office  should  be  conducted 
like  any  successful  business  office,  according  to  the  amount  of 
work  which  is  to  be  done. 

Handling  Correspondence 

The  next  thing  to  consider  is  the  adequate  handling  of 
correspondence.  A  great  deal  of  the  correspondence  which 
comes  to  the  secretary  is  of  a  personal  nature  and  therefore 
should  be  answered  personally.    All  letters  to  members  should 

begin:  "My  dear  Mr ,  and  never  "Dear  Sir."    They 

should  end  with  a  personal  felicitation,  such  as  "Kindest 
regards,"  or  with  a  reference  to  some  enjoyable  occurrence  that 
has  recently  taken  place,  or  with  something  pleasing  about  the 


226  TRADE  ASSOCIATIONS 

member  or  his  family.  They  should  conclude  with  a  "Very 
sincerely  yours."  It  may  seem  that  this  manner  of  letter- 
writing  is  not  businesslike,  but  remember  that  the  association 
is  built  up  largely  on  personal  relationships  and  that  you  cannot 
write  the  same  sort  of  impersonal  letter  to  a  member  that  you 
would  write  when  ordering  a  barrel  of  pickles. 

All  letters  to  members  should  be  made  as  brief  as  possible, 
and  when  possible  should  be  confined  each  to  a  single  topic.  If 
it  is  necessary  to  write  to  a  member  about  several  matters, 
each  topic  should  be  treated  in  a  separate  letter  as  this  aids  in 
filing.  It  is  desirable  to  state  briefly  at  the  head  of  the  sheet 
the  subject  of  the  letter.  The  letter-writing  habit  is  not  a 
good  habit,  and  yet  wise  is  the  secretary  who  has  everything 
briefly  confirmed  in  writing  and  is  careful  to  keep  his  carbon 
copy. 

The  motto  of  every  trade  secretary  and  of  every  prudent 
business  man — in  reference  to  correspondence,  should  be:  "Do 
right  and  don't  write." 

Personal  Letters 

Some  letters,  of  course,  will  have  to  be  mimeographed, 
because  few  associations  can  afford  to  keep  a  large  corps  of 
stenographers  continually  employed  for  the  purpose  of  writing 
original  letters;  but  in  so  far  as  possible  every  letter  to  a 
member  should  be  original  and  personal.  It  is  not  always 
possible  for  the  secretary  to  sign  personally  every  letter;  he 
may  be  away  from  the  office  or  the  association  membership 
may  be  too  large.  His  time  is  too  valuable  to  be  spent  in  purely 
mechanical  work.  He  should  make  sure,  however,  that  no 
letter  goes  out  without  proper  signature.  A  "dictated-but- 
not-read"  letter  should  never  be  sent;  it  is  little  short  of  an 
insult  to  the  recipient.  If  a  secretary  on  occasion  cannot  sign 
his  mail  then  someone  in  the  office  should  sign  all  his  letters 
with  the  secretary's  name. 


THE  SECRETARY — PROCEDURE  227 

In  mailing  correspondence  to  members  the  envelopes  should 
never  be  sealed  in  the  office  until  the  last  thing,  so  that  if  there 
are  tw^o  or  more  letters  or  reports  to  the  same  member  they 
may  all  go  in  the  same  envelope  and  thus  save  postage  as  well 
as  annoyance  in  opening  them. 

Neatness  in  correspondence  cannot  be  too  strongly  empha- 
sized, for  the  letter  itself  reflects  not  only  the  personality  of  the 
secretary  but  the  personality  of  the  association.  When  a  mem- 
ber receives  a  well-written  and  tasteful  letter,  unconsciously  he 
associates  those  characteristics  with  the  association  and  it  is 
by  just  such  continual  subconscious  suggestion  that  he  is 
made  a  stronger  member  and  a  greater  asset  to  the  association. 

Research  Work 

Any  association  that  expects  to  do  ^-aluable  work  must 
have  a  department  of  research,  either  for  establishing  stand- 
ards, or  for  making  corrections  and  investigations  necessary 
to  the  welfare  of  the  industry.  The  handling  of  research  work 
is  discussed  in  detail  in  Chapter  XVII.  Here  it  is  necessary 
merely  to  note  that  the  quality  of  work  of  this  kind  depends 
largely  on  the  character  of  the  persons  who  do  it.  One  of  the 
most  important  duties  of  a  secretary  is  to  see  that  this  work 
is  placed  in  the  hands  of  persons  who  are  fully  competent,  and 
that  they  carry  it  through  with  thoroughness  and  promptitude. 

A  Systematic  Program 

Everyone  who  is  familiar  with  modern  business  practice 
knows  of  the  "tickler"  system.  The  secretary  will  find  it 
helpful  to  have  a  large  diary,  with  a  week  on  two  opposite 
pages.  In  the  beginning  of  the  year,  if  he  has  regular  meet- 
ings, he  ought  to  go  through  this  book  and  make  a  note  of 
each  meeting  under  the  appropriate  date.  Then  he  should  turn 
back  in  the  diary  and  indicate  the  time  for  his  reminder,  and 
for  the  original  notice  of  each  meeting.     He  should  also  go 


228  TRADE   ASSOCIATIONS 

through  this  diary  and  in  so  far  as  possible  put  down  when 
certain  things  are  to  be  done  throughout  the  year,  anticipating 
them  by  two  weeks  or  a  month,  as  may  be  necessary,  by  mak- 
ing a  notation  in  the  book. 

Every  Saturday,  if  possible,  he  ought  to  look  forward  in 
his  book  to  see  what  is  to  come  the  next  week,  and  then  plan 
out  his  work  for  that  week  day  by  day.  Each  morning  when 
he  comes  to  the  office  he  should  look  over  in  his  book  the 
things  that  are  to  be  done  that  day,  and  get  them  done  just  as 
soon  as  he  can,  because  before  the  day  is  far  advanced  he  will 
be  interrupted  by  telephone  and  personal  calls,  or  by  committee 
meetings. 

Whenever  the  secretary  writes  a  letter  which  needs  a 
response,  he  should  keep  a  carbon  copy  of  that  letter  in  a 
drawer  near  at  hand,  preferably  the  top  or  right-hand  drawer 
of  his  desk.  The  carbon  should  not  be  filed  until  a  reply  to 
the  letter  is  received. 

The  next  thing  he  should  do  in  the  morning  is  to  look 
over  the  mail  and  find  out  how  many  of  the  letters  for  which 
he. holds  carbon  copies  have  been  answered.  Then  he  should 
clean  up  his  correspondence  for  the  day,  dictating  any  neces- 
sary follow-ups  that  his  pile  of  unanswered  carbons  may 
indicate,  and  calling  any  meetings  or  handling  other  matters 
which  need  prompt  attention. 

Sometimes  in  sending  out  quick  notices  to  members  a 
mimeograph  machine  is  necessary.  The  secretary  should 
therefore  dictate  his  letter  early  in  the  morning,  see  a  steno- 
graphic copy  of  it,  O  K  it,  and  then  get  the  mimeographed 
letter  out  of  the  way  immediately.  The  entire  office,  if  it  closes 
at  5:30,  should  center  on  having  all  work  completed  by  5 
o'clock,  thus  allowing  a  little  leeway  for  unforeseen  delays. 

By  other  means  or  devices  the  secretary  can  readily  plan 
to  keep  everything  alive  and  going,  and  he  should  never  let 
any  subject  die  from  lack  of  attention.     Everything  should  be 


THE  SECRETARY — PROCEDURE         229 

cleaned  up  definitely  one  way  or  the  other  and  the  sooner  the 
better. 

The  Yearly  Program 

At  the  beginning  of  the  year  the  secretary  should  always 
talk  over  with  the  president  the  plans  for  the  year,  and  in  so 
far  as  possible  a  program  should  be  established.  This  program 
can  then  be  divided  into  months,  and  the  months  so  far  as 
practicable  into  weeks.  Then  at  the  end  of  the  year,  the  presi- 
dent and  secretary  can  look  back  over  the  program  and  see 
what  has  or  what  has  not  been  done.  The  definite  program 
serves  as  a  chart  of  progress. 

Calls  from  Members 

When  out-of-town  members  come  to  the  city  they  should 
be  encouraged  to  call  at  the  association  headquarters,  even 
though  they  may  interrupt  the  secretary  in  his  immediate 
duties;  such  interruptions,  indeed,  constitute  an  important 
part  of  his  work.  The  members  usually  have  some  question 
to  discuss  with  the  secretary  and  he  should  at  all  times  be 
pleasant  and  cordial  in  giving  them  just  as  much  time  as  they 
desire.  They  should  at  least  telephone  the  association,  notify- 
ing the  secretary  at  what  hotel  they  are  staying  and  how  long 
they  expect  to  remain  in  town.  Then  if  another  member  or 
a  customer  calls  up  the  association  and  states  that  he  under- 
stands that  a  certain  member  is  in  the  city,  the  association  can 
tell  the  inquirer  when  and  where  to  get  in  touch  with  that 
member. 

One  might  go  on  suggesting  other  similar  details  of  office 
work  which  the  association  could  carry  on,  but  they  are  best 
left  to  the  ingenuity  and  originality  of  the  secretary,  who 
should  bear  in  mind  that  the  more  he  can  systematize  and  make 
effective  the  accurate,  steady  work  of  the  association,  the 
better  will  all  the  members  be  satisfied. 


230  TRADE   ASSOCIATIONS 

Secretarial  Visits  to  Members 

Calls  by  the  secretary  upon  the  members  are  the  pleasant 
oil  which  makes  the  machinery  of  an  association  run  smoothly. 
In  this  way  a  secretary  gains  a  more  intimate  contact  with  each 
member  and  the  member  has  a  chance  to  discuss  with  the 
secretary  many  matters  of  private  concern  for  which  time  is 
not  available  during  association  meetings  and  which  the  mem- 
ber would  not  be  inclined  to  discuss  in  writing.  Calls  keep 
a  secretary  away  from  home,  and  traveling  is  not  as  pleasant 
and  easy  work  as  being  in  an  office  but  by  these  calls  a 
secretary  cannot  help  but  gain  information,  which  otherwise 
might  not  come  to  his  attention  and  which  is  most  important 
to  the  welfare  of  the  association.  Even  though  business  may 
not  be  mentioned  at  all  during  a  secretary's  call  on  a  member, 
the  pleasant  relationship  thus  built  up  is  of  great  value  to 
the  association, 

A  secretary  should  endeavor  to  call  on  all  members  at  least 
two  or  three  times  a  year.  If  the  association  is  too  large  for 
him  to  do  it  personally,  then  assistants  can  do  it;  but  just  as 
we  like  to  meet  the  president  of  a  company,  so  a  member  likes 
to  meet  the  secretary  himself,  and  he  resents  it  when  an 
assistant  or  field  secretary  comes  around  instead.  The  secre- 
tary should  write  well  in  advance  when  he  contemplates  a  call, 
to  tell  the  member  just  when  he  is  coming.  Then  the  member 
can  arrange  to  be  at  home  if  it  is  possible  and  if  not  the  secre- 
tary is  of  course  notified  and  is  saved  a  useless  trip. 

Averting  Dissension 

A  call  by  the  secretary  on  a  member  may  serve  as  a  safety- 
valve,  permitting  the  member  to  present  some  grievance  which 
he  would  like  to  discuss.  The  discussion  often  so  relieves  his 
mind  that  he  thinks  no  more  about  the  matter.  He  may,  per- 
haps, have  some  complaint  against  another  member  which  the 
secretary  can  either  correct  by  a  word  or  two,  or  can  take 


THE  SECRETARY — PROCEDURE  23 1 

under  advisement  and  investigate  and  thus  head  off  unfor- 
tunate consequences.  If  the  grievance  were  allowed  to  grow, 
it  might  eventually  become  to  the  member  concerned  some- 
thing most  important  and  real.  Then,  too,  when  a  member  has 
an  opportunity  thus  to  relieve  himself  to  the  secretary  he  does 
not  come  to  a  meeting  and  attempt  to  bring  in  these  irrelevant 
personal  matters  at  that  time  before  all  the  other  members,  and 
thus  interrupt  the  consideration  of  business  of  general  interest. 
Before  calling  on  a  member  a  secretary  should  look  over 
carefully  the  regular  reports  which  the  member  is  making  to 
the  association  and  should  familiarize  himself  with  all  the 
conditions  of  that  particular  member's  business.  He  should 
also  inform  himself  of  any  subjects  in  which  the  member  might 
be  interested,  so  as  to  be  posted  on  the  latest  information  con- 
cerning them  if  the  member  should  ask  for  further  informa- 
tion. In  making  calls  a  secretary  should  go  prepared  with 
particular  information  applicable  to  each  individual  member. 

The  Secretary  as  Treasurer 

In  many  associations  the  secretary  and  the  treasurer  are 
one  and  the  same  man.  It  is  felt  by  some  that  such  an  arrange- 
ment is  undesirable,  because  the  secretary  should  not  be  em- 
barrassed by  having  to  collect  dues  and  assessments  from  the 
members;  but  if  an  association  amounts  to  anything  there 
should  be  no  embarrassment  in  this.  The  average  dues  and 
assessments  are  inconsequential  in  comparison  with  the  asso- 
ciation services  and  for  that  reason  should  never  be  given  much 
consideration  by  a  member  except  to  see  that  they  are  paid 
promptly.  On  the  other  hand,  as  the  association  has  head- 
quarters and  the  facilities  for  keeping  accounts,  sending  out 
bills,  and  doing  all  other  work  that  has  to  be  done  by  the 
treasurer,  it  makes  for  convenience  if  the  secretary  serves  in 
the  double  capacity.  And  surely,  if  he  is  to  be  trusted  with  the 
statistics  and  private  information  of  the  members,  he  can  be 


232  TRADE   ASSOCIATIONS 

trusted  with  this  minor  point  of  their  finances.  His  books  can  be 
audited  once  a  year  and  at  the  annual  meeting  he  should  be 
required  to  give  a  detailed  statement  of  his  accounts. 

Another  reason  why  this  arrangement  is  most  desirable  is 
where  associations  base  their  prorated  assessments  on  gross 
sales  for  the  year  previous.  A  member  would  not  hesitate  to 
give  his  gross  sales  to  the  secretary  just  as  he  gives  him  other 
confidential  information,  but  he  might  not  like  to  give  this 
information  to  another  member  who  chanced  to  be  serving  in 
the  capacity  of  treasurer. 

A  voucher  system  of  accounts  should  be  kept  and  a  detailed 
record  made  of  all  expenditures.  The  secretary  should  be 
especially  careful  to  report  every  cent  of  cash  expenditure  by 
himself.  Then  if  any  member  ever  questions  why,  for 
instance,  so  much  money  has  been  spent  on  travel,  there  is  a 
detailed  account  on  file  with  the  voucher  to  show  every  ex- 
pense.   This  is  only  sound  business  procedure. 

Compensation 

The  compensation  of  the  secretary  varies  with  the  associa- 
tion. A  majority  of  embryonic  associations  imagine  that  they 
can  employ  a  secretary  for  about  the  same  price  that  they 
would  have  to  pay  a  clerk ;  and  in  procuring  a  so-called  secre- 
tary for  that  price  they  generally  get  only  a  clerk.  Then  they 
wonder  why  their  association  does  not  progress.  If  the  secre- 
tary is  really  competent,  the  amount  of  his  compensation 
should  not  be  a  matter  of  any  great  consideration  to  the  mem- 
bers. Even  if  he  were  to  draw  a  large  salary,  it  would  be  a 
comparatively  small  fraction  of  i  per  cent  of  the  gross  sales 
of  the  members,  which  are  influenced  by  the  success  of  the 
association. 

A  large  number  of  the  successful  secretaries  in  this  country 
who  are  handling  large  associations  receive  from  $10,000  to 
$25,000  or  more  a  year.     If  an  association  cannot  afford  to 


THE   SECRETARY — PROCEDURE  233 

pay  such  a  salary  to  get  the  right  kind  of  man,  it  is  a  good 
arrangement  for  several  associations,  especially  if  they  are 
in  one  particular  industry,  to  hire  the  same  secretary.  Such 
an  arrangement  makes  it  possible  to  pay  him  in  total  enough 
to  make  unattractive  to  him  outside  business  offerings,  or 
other  secretarial  positions.  Thus  each  association  does  not 
have  to  pay  as  large  a  salary  as  would  be  necessary  otherwise, 
and  its  office  expenses  also  are  shared  with  the  other  associa- 
tions. There  can  be  no  question  of  the  old  theory  that  a 
laborer  is  worthy  of  his  hire,  and  that  a  first-class  secretary 
must  be  well  compensated  if  he  is  to  be  secured  and  re- 
tained. 

Another  advantage  of  several  associations  being  conducted, 
where  possible,  by  the  same  secretary  with  one  headquarters 
is  that  a  large  and  competent  staff  can  be  maintained  without 
a  burdensome  expense  for  any  one  association.  With  a  large 
stafif  much  more  can  be  accomplished.  For  instance,  if  one  of 
the  associations  wants  to  get  out  a  special  report  immediately, 
the  entire  stafif  can  concentrate  on  the  report  and  issue  it  in  two 
days,  whereas  a  small  staff  employed  by  one  association  alone 
would  have  to  take  a  week  or  ten  days  to  accomplish  the  same 
work.  In  a  large  staff  each  person  can  have  some  specialized 
duty,  which  makes  for  efficiency. 

The  Secretary's  Opportunity 

The  position  of  a  secretary  is  largely  what  he  wants  to 
make  it.  There  are  but  few  positions  which  offer  a  larger 
freedom  of  action.  The  conscientious  secretary  does  not 
endeavor  to  confine  himself  to  a  union  schedule.  Indeed  he 
generally  is  thinking  of  his  work  throughout  his  waking  hours. 
While  he  is  not  expected  to  punch  a  time-clock,  he  is  not  hired 
to  be  an  idler.  Fortunately,  if  an  association  amounts  to 
anything  such  a  secretary  does  not  last  long;  it  is  results, 
within  reasonable  limits,  which  members  ask  for  and  are  satis- 


234  TRADE   ASSOCIATIONS 

fied  with,  first,  last,  and  always.  If  the  secretary  does  his 
work  conscientiously  and  to  the  best  of  his  ability,  and  is  a 
man  suited  for  the  vocation,  he  need  not  worry  over  any 
possibility  of  having  to  apologize  or  explain  about  his  work 
or  about  the  association ;  they  will  speak  for  themselves. 


CHAPTER  XVI 

r 
£SJv 

FACTS  AND  THEIR  VALUE 

The  Value  of  Correct  Trade  Information 

Every  sincere  business  man  is  seeking  the  truth  about  his 
business,  and  its  position  relative  to  the  industry  of  which  it 
is  a  part.  To  have  his  business  influenced  by  groundless 
rumor,  incorrect  information,  or  to  be  without  information 
altogether,  is  to  have  his  house  built  on  shifting  sands.  To 
learn  the  truth,  however,  is  not  easy.  A  man  may  know  all 
the  facts  in  connection  with  his  own  company,  but  it  is  an 
extremely  difficult  thing  to  secure  exact  and  trustworthy 
knowledge  of  the  industry  as  a  whole. 

It  is  surprising  that  for  so  many  years  industries  have  gone 
along  without  much  knowledge  about  essential  conditions, 
either  within  their  own  fields  or  in  relation  to  general  business. 
That  is  one  of  the  reasons  why  American  industries,  in  spite  of 
many  advantages  of  situation,  have  not  progressed  co- 
ordinately  with  those  in  Europe. 

Destructive  Competition  the  Result  of  Trade  Ignorance 

The  principal  reason  for  destructive  competition,  as  has 
been  stated  earlier  in  this  book,  is  not  any  inherent,  belligerent 
desire  on  the  part  of  an  individual  manufacturer  to  crush  his 
competitors;  it  is  rather  the  lack  on  his  part  of  reliable  facts 
to  provide  a  sound  basis  for  his  judgment.  When  the  average 
business  man  is  supported  by  an  intelligent  knowledge  of  facts, 
he  is  a  man  of  good  judgment.  Give  him  the  exact  truth  about 
a  situation,  in  a  form  that  he  comprehends,  and  the  great 
majority  of  competitive  conflicts  will  take  care  of  them- 
selves. 

235 


236  TRADE   ASSOCIATIONS 

Eliminating  Market  Fluctuations 

One  certain  result  of  a  knowledge  of  market  conditions 
within  an  industry  over  a  period  of  years  will  be  the  automatic 
elimination  of  market  fluctuations.  This  is  not  a  theory  but  a 
proved  fact.  When  the  manufacturers  in  an  industry  have 
clearly  before  them  the  condition  of  stocks  in  the  market  and 
the  relation  of  supply  to  demand,  the  supply  will  adjust  itself 
accordingly;  there  will  be  neither  feasts  nor  famine  in  the 
placing  of  orders.  This  evenness  of  production  benefits  ma- 
terially the  ultimate  consumer  since,  if  a  manufacturer  who 
deals  in  a  staple  product  can  keep  up  his  production  twelve 
months  in  the  year  and  can  equalize  and  reduce  his  overhead 
costs,  he  will  be  able  to  sell  his  product  at  a  lower  price.  But 
if  a  manufacturer  is  surfeited  with  orders  three  months  of 
the  year  and  is  practically  without  any  for  the  rest  of  the  time, 
his  turnover  is  very  small,  the  expense  of  carrying  stock  on 
hand  is  great,  and  often  he  becomes  overstocked  and  has  to 
shut  down. 

Shut-Downs  Expensive 

A  shut-down  is  an  expensive  expedient  for  all  concerned. 
Employees  are  thrown  out  of  positions  and  often  migrate  to 
another  industry  in  their  search  for  work.  Then  they  must 
be  replaced  by  new  hands,  who  spoil  products  in  learning  how 
to  make  them,  and  the  general  organization  of  the  factory  is 
considerably  disrupted.  During  a  shut-down  the  factory  over- 
head goes  on  just  the  same,  without  any  compensating  produc- 
tion to  relieve  it.  Hence  when  production  begins  again  the 
prices  have  to  bear  the  burden  of  the  shut-down.  But  if  a 
knowledge  of  supply  and  demand  in  the  market  is  in  the  hands 
of  every  manufacturer  and  he  independently  governs  his 
actions  accordingly,  the  industry  adjusts  itself,  avoids  an  un- 
equal distribution  of  business,  and  is  able  to  keep  in  reason- 
ably constant  operation. 


FACTS   AND   THEIR   VALUE  237 

This  statement,  of  course,  does  not  apply  to  industries 
which  are  seasonal ;  such  industries  always  adjust  themsehes 
to  the  product  which  they  happen  to  handle,  and  the  ultimate 
consumer  expects  to  pay  the  extra  cost  simply  because  he  is 
buying  a  seasonable  product. 

The  Advance  of  Business  Research 

"Research"  is  the  key-note  today  in  factory,  department 
store,  and  wholesale  center,  as  well  as  in  the  university  labora- 
tory. This  had  begun  to  be  true  before  the  World  War,  but 
undoubtedly  the  war  did  much  to  make  clear  to  business  men 
everywhere  the  value  of  scientific  planning  and  accurate 
knowledge  of  facts  as  the  basis  for  such  planning.  Not  only 
has  research  been  rapidly  extended  to  the  fields  of  production, 
but  the  managers  of  business  enterprises  have  found  it  neces- 
sary to  apply  its  principles  to  the  methods  of  purchasing  and 
selling  goods,  to  market  conditions,  to  prices  and  costs,  and 
to  the  factors  by  which  market  fluctuations  may  be  anticipated. 

The  president  of  a  large  corporation  recently  closed  a  dis- 
cussion with  his  executives  with  these  words : 

You  have  your  opinions  about  this  matter  and  I  have 
mine.  My  opinion  is  as  good  as  yours  and  yours  is  as  good 
as  mine.  Probably  neither  is  worth  anything.  Get  the  facts 
and  figures  and  let's  decide  the  matter  on  facts  and  figures 
and  not  on  opinion.  Get  enough  facts  and  enough  figures 
and  they  will  decide  any  problem  without  argument. 

The  tendency  to  standardize  research  methods  in  all  forms 
of  business  is  interestingly  discussed  in  a  highly  scientific 
article  on  the  subject  by  Horace  Sccrist  in  the  March,  1920, 
issue  of  the  American  Statistical  Association's  quarterly  pui:)li- 
cation.  As  to  the  application  of  scientific  methods  to  present- 
day  conditions,  this  writer  says: 

Research  implies  a  laboratory  from  which  facts  may  be 
secured  or  in  which  they  may  be  developed.    Because  of  the 


238  TRADE   ASSOCIATIONS 

frame  of  mind  which  the  war  developed  and  nurtured, 
business  today,  in  many  respects,  constitutes  an  ideal  labora- 
tory. Merely  as  the  result  of  daily  operations,  great  masses 
of  comparable  facts  which  may  be  statistically  expressed 
are  currently  developed.  Some  of  these  are  crude,  it  is  true 
— they  are  "in  the  rough."  This  is  especially  so  in  small 
businesses  where  accounting  principles  are  neglected  or 
ignored,  or  where  competition,  state  control,  or  public  neces- 
sity has  not  required  comparable  records  to  be  kept.  In  the 
larger  industries,  however,  where  markets  are  wide  and 
competition  severe,  and  where  large-scale  production,  utiliza- 
tion of  waste,  and  the  creation  of  by-products  is  the  rule,  the 
facts  are  far  more  nearly  satisfactory.  Not  for  all  purposes, 
of  course,  for  no  business  fact,  however  carefully  prepared, 
is  equally  good  for  all  purposes.  Definition,  measurement, 
and  use  are  interrelated ;  they  cannot  be  divorced  from  one 
another.  The  field  for  business  research  is  ready  or  in  prep- 
aration; the  sanction  for  research  is  daily  being  extended  to 
private  and  public  agencies.  This  sanction  must  neither  be 
abused  nor  destroyed. 

In  the  effort  to  standardize  business  facts  Mr.  Secrist 
adduces  six  prime  requisites: 

1.  Statistical  units  must  be  homogeneous. 

2.  Statistical  facts  must  be  representative. 

3.  Facts  must  fit;  they  must  be  germane. 

4.  Facts  must  be  stable ;  they  must  relate  to  purposes  and 

conditions  that  are  essentially  uniform. 

5.  Both  the  facts  themselves  and  the  conditions  of  meas- 

urement must  be   comparable.      Like  can  only  be 
compared  with  like. 

6.  Facts  must  be  essentially  accurate. 

In  his  book  "Industrial  Research,"  Dr.  C.  S.  Duncan,  of 
the  University  of  Chicago,  special  expert  of  the  United  States 
Shipping  Board,  predicts  a  new  era  of  co-operation  and  co- 
ordination and  a  greater  stimulus  on  the  part  of  business  men 
in  the  use  of  scientific  knowledge. 


FACTS    AND    THEIR   VALUE  239 

In  the  preface  of  his  book  Dr.  Duncan  says: 

1.  The  immediate  and  primary  need  of  business  today  is 
intelligent  direction  and  control,  individually,  generally. 

2.  Intelligent  direction  and  control  of  business  can  be  had 
only  by  a  better  knowledge  of  business  principles. 

3.  A  better  knowledge  of  business  principles  can  be 
derived  only  from  a  careful  and  comprehensive  survey  of 
business  facts. 

4.  To  secure  a  careful  and  comprehensive  survey  of 
business  facts  is  a  problem  for  business  research. 

5.  Therefore,  the  immediate  and  primary  need  of  business 
today  can  be  met  only  by  business  research. 

This  means,  also,  that  the  research  work  so  well  begun 
in  the  field  of  production  should  be  carried  over  into  trade, 
into  buying  and  selling.  The  beginning  and  the  end  of  every 
business  enterprise  is  a  marketing  problem.  The  problems 
of  marketing,  therefore,  like  factory  problems,  must  be  iso- 
lated, abstracted,  analyzed  after  the  scientific  method.  More 
deliberate,  concentrated,  prolonged,  and  undisturbed  thinking 
ought  to  be  applied  to  business  problems.  They  are  of  vital 
importance  to  success;  they  are  fascinatingly  interesting  in 
themselves;  their  very  difficult  complexity  is  a  stimulating 
intellectual  challenge;  the  rewards  which  their  correct  solu- 
tion offers  have  no  determinable  limit. 

No  matter  how  astute  or  well  informed  a  manufacturer 
may  be  in  the  theory  of  business,  it  is  his  manner  of  applying 
his  knowledge  which  affects  his  product.  The  constant 
acquisition  of  new  facts  about  market  conditions  is  not  an 
innovation  and  is  not  "theoretical" ;  it  is  business  sense.  Many 
a  manufacturer  whose  father  got  along  by  himself  with- 
out paying  much  attention  to  other  concerns  has  been  surprised 
to  find  out  how  much  better  he  could  do  than  father,  after  he 
has  informed  himself  as  to  wnat  the  others  were  doing  and  as 
to  his  own  relation  to  them.  And  many  an  industry  has  been 
immensely  improved  in  prosperity  by  realizing  that  all  those 
interested  were  conducting  their  business  with  a  knowledge  of 
facts.     Definite  knowledge  of  facts  has  benefited  not  only  the 


240  TRADE   ASSOCIATIONS 

manufacturers  or  the  merchants,  or  whoever  it  may  be  who 
make  up  the  industry,  but  the  ultimate  consumer  as  well — 
in  respect  both  to  the  price  and  to  the  manner  of  marketing 
the  product. 

Therefore,  since  it  is  proved  that  actual  facts  in  the  hands 
of  the  average  man  are  much  better  than  an  endless  number 
of  theories,  let  us  consider  how  he  is  to  procure  these  facts. 

An  Important  Function  of  an  Association 

One  of  the  most  important  functions  of  an  association  is 
to  give  its  members  reliable  information — facts — about  the 
industry  which  it  represents  and  about  general  market  con- 
ditions. It  is  surprising  to  find  out  how  few  of  the  trade 
associations  in  the  United  States  have  gone  into  this  matter 
hitherto  in  a  businesslike  way.  The  statistics  which  they  have 
compiled  have  been  so  incomplete  as  to  nullify  their  effort,  and 
have  made  people  exceedingly  skeptical  as  to  the  value  of  all 
statistics.  The  World  War,  however,  required  a  great  many 
industries  to  get  certain  facts  together  in  order  that  they 
might  receive  proper  consideration  by  the  Priorities  Committee 
and  such  controlling  organizations  as  were  in  existence  in 
Washington  during  our  national  participation.  This  training 
in  gathering  together  trade  facts  has  really  been  one  of  the 
benefits  that  have  come  out  of  the  war,  although  it  is  to  be 
regretted  that  it  needed  the  war  to  make  people  conscious  of 
the  necessity  for  such  procedure. 

So,  of  course,  before  the  persons  concerned  in  an  industry 
can  gain  the  facts  they  need,  they  must  have  some  agency  to 
collect  and  disseminate  them.  That  is  another  reason  for  a 
well-organized  trade  association. 

Confidence  the  Key-Note 

It  is  necessary  first  that  at  least  a  few  of  the  members  in  an 
association  should  have  the  desire  for  statistics  or  facts,  and 


FACTS    AND  THEIR  VALUE  241 

enough  confidence  in  each  other  to  be  willing  to  interchange 
this  information  through  the  secretary. 

It  is  likewise  necessary  that  these  members  shall  have 
sufficient  confidence  in  the  secretary  and  that  the  secretary 
should  be  a  man  of  such  integrity  that  the  facts  can  be  given 
to  him  without  a  violation  of  confidence.  Very  few  members 
of  an  association  have  enough  faith  in  one  another  at  the  out- 
set to  make  statistics  possible.  A  new  association  makes  a 
mistake  if  it  endeavors  to  build  up  within  a  few  months  a  com- 
plete statistical  system  of  information.  The  attempt  has  been 
often  made  but  it  has  never  succeeded. 

The  usual  result  of  an  attempt  to  produce  statistics  too 
soon  is  that  the  statistics  are  of  slight  value  and  the  members 
get  discouraged;  they  lose  their  interest  in  the  project  and 
their  desire  for  adequate  and  thorough  statement  of  the  facts 
fades  out.  An  association  should  not  be  too  hasty  in  under- 
taking this  activity,  important  as  it  is,  merely  because  some 
outside  influence  recommends  it  to  them.  After  the  members 
have  become  well  acquainted  with  one  another  and  have  dis- 
cussed matters  in  meetings,  and  after  the  desire  for  definite 
information  springs  up  among  themselves,  then  they  can  decide 
on  what  kind  of  statistics  to  collect. 

The  Danger  of  Undertaking  Too  Much 

As  stated  above,  it  is  undesirable  for  an  association  to  try 
to  get  up  its  statistics  all  at  once.  The  average  vigorous  busi- 
ness man  is  anxious  to  see  things  done  as  soon  as  possible,  but 
all  concerned  should  remember  that  they  are  dealing  with 
human  nature  and  bear  in  mind  tlie  psycholog}-  of  the  average 
man.  You  cannot  force  a  man  into  a  situation  concerning 
which  in  the  beginning  he  is  skeptical.  The  business  man 
naturally  hesitates  at  first  to  give  out  any  information  about 
his  business,  even  to  a  secretary  in  whom  he  has  confidence. 
It  is  a  process  of  education ;  and  we  all  know  that  no  man  can 


242  TRADE   ASSOCIATIONS 

be  educated  overnight,  no  matter  how  good  the  teacher  may  be 
or  how  convincing  the  subject. 

Simple  Reports  at  First 

When,  therefore,  an  association  has  decided  to  interchange 
facts,  the  interchange  should  be  made  just  as  simple  as  possible. 
If,  for  example,  it  is  an  associaton  of  lumber  dealers,  no  attempt 
should  be  made  at  first  to  divide  all  the  reports  into  the  various 
grades  of  lumber,  but  rather  lumber  should  be  treated  in  the 
beginning  as  an  entity,  and  the  members  should  be  asked  to 
report  merely  what  their  total  orders  have  been,  what  their 
purchases  have  been,  what  they  have  shipped,  and  what  stock 
they  have  in  the  lumber  yard.  This  information  can  then  be 
compiled  in  total,  and  if  there  are  twelve  members,  for  in- 
stance, the  report  can  state  for  that  month  or  week,  according 
to  the  time  decided  upon,  just  what  the  total  condition  is  for 
those  twelve  members.  There  is  no  way  then  by  which  the 
individual  business  of  a  member  can  be  known,  and  a  member 
will  therefore  be  much  more  ready  to  contribute  his  facts. 

But  even  if  there  are  but  twelve  members  in  an  associa- 
tion, it  will  doubtless  be  found  that  at  first  only  three  or  four 
of  them  will  want  to  send  this  information  to  the  secretary. 
Later  on  another  one  may  come  in,  and  then  another,  until  all 
are  reporting.  This  has  been  the  experience  of  the  few  asso- 
ciations which  do  get  up  statistics,  namely,  that  their  statistics 
all  began  in  a  small  way  with  reports  from  a  few  members 
only,  and  that  the  statistics  gradually  grew  by  the  participation 
in  the  reports  of  a  new  member  every  month  or  so. 

Elaborating  Reports 

After  the  members  have  had  an  opportunity  to  see  the 
value  of  a  small  and  simple  report,  they  will  of  themselves 
suggest  that  the  report  be  made  a  little  more  detailed.  Then, 
to  go  back  again  to  the  example  of  the  lumber  industry,  the 


FACTS    AND   THEIR   VALUE  243 

reports  can  be  divided  into  grades  and  separated  into  as  much 
detail  as  is  desired. 

When  this  point  is  reached  the  objection  will  be  raised  that 
as  soon  as  one  begins  separating  the  reports  into  grades  of 
material,  or  in  any  way  refining  them  or  making  them  clearer, 
the  members  who  are  dealing  in  one  grade  may  see  that  another 
grade  is  doing  better  and  shift  over  to  that  grade.  Or  it  will 
be  urged  that  if  there  are  only  two  or  three  people  dealing  in 
a  certain  grade,  the  condition  of  the  business  of  these  few  will 
be  too  well  known.  This  is  merely  a  fancy  which  docs  not 
work  out  in  fact;  but  if  such  objections  are  urged,  the  associa- 
tion or  secretary  must  not  be  discouraged  or  think  the  situation 
hopeless. 

When  reports  have  begun  to  be  elaborated,  the  members 
will  want  more  and  more  of  them;  and  after  several  years, 
reports  will  be  issued  by  the  association  which  at  the  outset 
not  even  the  most  enthusiastic  member  would  have  thought 
possible. 

But  note  well  the  statement  that  it  takes  several  years. 
Many  men  and  many  associations  have  thought  that  their 
reports  were  valueless  because  they  were  not  developed  and 
perfected  in  a  few  months.  If  the  average  association  is  able 
to  develop  a  reliable  and  complete  system  of  reports  inside  of 
five  years,  it  can  consider  that  it  has  made  exceedingly  good 
progress.  Some  have  made  better  time  and  some  have  taken 
longer;  but  the  average  is  about  five  years. 

Participation  in  Reports  Voluntary,  Not  Compulsory 

Some  associations  make  participation  in  reports  compul- 
sory for  all  members.  Generally  speaking,  better  results  are 
obtained  if  participation  is  voluntary.  The  old  saying  about 
leading  a  horse  to  water  applies.  Unless  the  member  is  con- 
vinced that  the  reports  are  desirable,  his  participation  in  them 
is  worthless;  the  individual  rebels  at  being  forced  to  do  any- 


244  TRADE   ASSOCIATIONS 

thing  against  his  will,  and  almost  inevitably  he  looks  askance 
at  the  results. 

Participation  in  reports  is  a  matter  of  education,  and  for 
that  reason  takes  time  and  patience;  but  it  is  worth  waiting 
for.  When  once  the  member  has  of  himself  expressed  a 
willingness  to  bear  a  part  he  always  does  it  a  great  deal  better 
and  receives  a  great  deal  more  benefit  thereby  than  if  he  had 
been  made  to  do  it.  This  statement,  however,  does  not  mean 
that  the  secretary  should  not  endeavor  at  all  times,  in  as  diplo- 
matic a  way  as  possible,  to  call  to  the  attention  of  non- 
reporting  members  the  desirability  of  participation.  Very 
often  a  member  does  not  report  simply  because  he  is  not  really 
familiar  with  the  purpose  of  the  reports  and  how  to  make 
them  out.  He  often  thinks  they  are  more  trouble  than  they 
are  worth.  But  the  wise  secretary,  who  knows  each  associa- 
tion member's  personality,  can  frequently  dispel  such  mis- 
understandings in  the  course  of  informal  conversation. 

Making  Reports  Accurate 

In  the  beginning  of  this  chapter  it  was  stated  that  in- 
accurate association  reports  are  most  harmful.  The  question 
immediately  suggests  itself:  "How  can  reports  be  made 
accurate  ?" 

In  the  first  place  each  individual  member  must  be  accurate 
in  reports  which  he  sends  in  to  the  association.  But  one 
may  ask,  "How  can  you  guarantee  that  he  is  telling  the  truth 
in  his  reports?"  The  answer  is:  When  a  member  realizes 
the  value  of  reports  he  does  not  vrish  to  receive  incorrect 
information,  and  therefore  he  is  not  /foing  to  send  in  incorrect 
information  which  will  render  inaccurate  the  total  which  he 
receives.  The  accuracy  of  the  association  report  is  in  direct 
ratio  to  the  accuracy  of  the  individual  statements  on  which 
it  is  based. 

But,  as  noted  already,  if  a  man  is  compelled  to  participate 


FACTS   AND   THEIR   VALUE  245 

in  reports,  he  may  unconsciously  send  incorrect  statements 
simply  because  he  is  not  interested  in  them  or  in  the  results  to 
which  they  may  lead. 

Making  Reports  Understandable 

Reports  or  statistics  are  not  worth  the  paper  upon  which 
they  are  written  or  printed  if  they  are  not  understood  by  the 
recipient.  The  reason  for  compiling  the  facts  aljout  an  indus- 
try is  not  to  show  the  mathematical  ability  of  an  association, 
or  the  beauty  or  cleverness  of  the  manner  of  presentation,  but 
to  convey  to  the  mind  of  the  recipient  the  true  facts  about  mar- 
ket conditions,  so  that  he  may  intelligently  govern  his  actions. 

The  average  business  man  is  not  a  statistician,  nor  has  he 
the  time  or  inclination  to  sit  down  with  a  mass  of  figures  in 
front  of  him  and  try  to  dig  out  of  them  what  they  mean  in 
relation  to  the  conditions  in  his  industry.  The  secretary  and 
his  assistants  should  make  this  analysis  for  him. 

In  this  connection  it  should  also  be  noted  that  graphic 
methods  of  presentation  are  of  great  assistance  in  the  clear 
formulation  of  a  report.  Rightly  to  serve  its  purpose,  the 
report  should  be  a  picture ;  that  is  to  say,  it  should  be  in  a  form 
which  can  at  once  be  comprehended,  at  least  in  all  its  essential 
features.  A  member  can  understand  market  conditions  a  great 
deal  better  if  he  can  see  at  a  glance  what  the  conditions  are. 
The  effort  should  be  made  accordingly,  whenever  possible,  to 
present  information  in  graphic  form. 

But  the  graphic  presentation  of  facts  should  also  be  ac- 
companied by  the  figures  in  numerical  detail,  so  that  if  a 
member  finds  a  condition  in  the  graphic  report  which  surprises 
him  he  can  immediately  turn  back  to  the  figures  and  find  out 
the  reason.  The  man's  interest  in  the  report  must  first  be 
gained,  and  after  that  his  general  comprehension.  When  these 
two  things  are  accomplished  he  will  often  study  a  page  of  facts 
which,  if  glanced  at  in  the  beginning,  would  have  repelled  him. 


246  TRADE   ASSOCIATIONS 

When  once  the  member  has  become  accustomed  to  looking 
forward  to  his  reports  and  to  relying  upon  them  in  drawing 
his  deductions,  he  will  unconsciously,  whether  he  admits  it  or 
not,  govern  his  actions  accordingly. 

Reports  Relieve  Worry 

For  example,  a  man  may  be  conducting  a  factory  in 
northern  Vermont  which  requires  his  close  attention.  He  is 
unable  to  get  away  and  meet  his  competitors  or  even  his  cus- 
tomers, and  must  rely  on  such  information  as  he  can  gain  by 
correspondence,  from  the  newspapers  or  trade  journals,  or 
from  his  impressionable  salesmen.  No  matter  how  reliable  a 
salesman  may  be,  he  is  certain  sometimes  to  be  misled  by 
statements  as  to  what  are  supposed  to  be  actual  facts. 

During  a  time  of  depression  this  manufacturer  away  up 
in  the  woods  may  be  wondering  what  his  competitors  are 
doing.  He  may  be  operating  only  two  or  three  days  a  week — 
perhaps  getting  no  new  business  at  all — and  he  may  be  under 
the  impression  that  his  competitors  are  all  running  full.  His 
salesmen,  in  order  to  excuse  their  own  shortcomings,  will 
doubtless  claim  that  they  are  losing  business  to  other  people 
because  these  other  people  are  cutting  prices,  etc.  Thus  this 
manufacturer  worries  a  great  deal  over  conditions  and  won- 
ders if  he  is  permanently  losing  his  business. 

But  when  he  belongs  to  an  association  that  sends  him  at 
least  every  week  a  report  showing  the  business  conditions  of 
the  entire  industry,  and  also  a  confidential  report  about  his 
particular  relation  to  the  industry,  and  when  he  knows  that 
other  manufacturers  are  likewise  not  operating  full  and  that 
business  generally  is  dull,  he  is  greatly  relieved  and  reassured. 
He  does  not  think  black  thoughts  about  his  competitors,  or 
send  his  salesmen  out  with  an  idea  of  selling  goods  below  cost ; 
instead  of  this  he  desires  to  continue  operating,  just  as  his 
competitors  are  doing. 


FACTS    AND   THEIR   VALUE  247 

It  is  interesting  to  note  that  often  when  mails  are  delayed 
and  a  report  fails  to  arrive  on  time,  a  member  will  telegraph 
the  secretary  and  find  out  what  the  report  is,  so  anxious  is  he 
to  be  reassured  about  the  conditions  of  the  industry.  In  fact, 
one  of  the  greatest  values  of  a  report  is  that  it  relieves  a  mem- 
ber's mind  with  respect  to  current  conditions.  That  helps  him 
materially  to  conduct  his  business  in  a  better  and  more  satis- 
factory manner. 

Industrial  Report  Services 

In  recent  years  several  industrial  report  services  have  been 
established.  Sometimes  an  association  cannot  go  to  the  ex- 
pense of  creating  an  expert  economic  bureau  to  collect  and 
interpret  market  facts.  A  service  to  collect  and  interpret  such 
data  for  the  various  industries  can  do  this  work  much  more 
economically  and  efficiently,  because  it  can  afford  to  get  the 
best  experts  and  statisticians  and  to  maintain  such  an  organiza- 
tion as  will  give  the  best  results.  When  these  unattached 
service  bureaus  are  established  some  industries,  or  even  asso- 
ciations, make  independent  application  to  them  for  statistical 
service  and  information.  This  does  not  interfere  in  the  least 
with  the  work  of  the  association ;  it  merely  relieves  the  associa- 
tion of  part  of  its  task  of  collecting,  compiling,  and  interpret- 
ing market  facts. 


CHAPTER  XVII 

STATISTICS  AND  THEIR  USE 

The  Statistician 

The  average  secretary  is  not  a  statistician,  and  even  if  he 
were  he  should  not  occupy  his  time  with  such  detail  work.  He 
should  understand  statistics,  their  theory  and  practical  possibili- 
ties, and  in  the  beginning  of  the  association's  activity  he  will 
probably  compile  the  reports.  But  as  the  association  reports  be- 
come more  extensive,  it  will  be  necessary  to  employ  an  expert 
statistician  who  is  thoroughly  familiar  with  theory,  compila- 
tion, and  interpretation  of  reports.  Others  of  the  same  sort 
may  be  added  to  the  staff  later  on. 

If  statistics  are  to  be  worth  anything  at  all  they  must  be 
right,  and  to  insure  this  their  preparation  must  be  in  the  hands 
of  the  right  sort  of  people.  Not  every  person  who  can  run  an 
adding  machine  can  compile  statistics.  Merely  adding  figures 
and  striking  averages  in  order  to  show  percentages  and  totals 
is  of  the  very  least  importance  in  producing  statistical 
reports. 

The  competent  statistician  is  able  in  the  first  place  to 
differentiate  and  to  appraise  the  various  records  and  state- 
ments that  come  to  his  attention.  He  can  tell  when  a  company 
makes  a  report  to  him,  whether  it  is  consistent  with  the  possi- 
bilities of  that  company's  production  and  general  business 
record ;  whether,  that  is  to  say,  it  is  correct,  or  incomplete,  or 
doctored.  In  the  second  place  he  is  able,  in  the  reports  which 
he  himself  compiles,  to  present  this  mass  of  data  in  a  form 
which  correctly  and  clearly  interprets  it.  Thus  his  reports 
show  the  real  facts  of  market  conditions  as  the  statistics  reveal 
them. 

248 


STATISTICS   AND   THEIR   USE  249 

Reliable  Statistics  Not  Expensive  Relatively 

The  right  sort  of  people  cost  money.  But  the  relative  cost 
of  reliable  statistics,  if  they  accomplish  the  ends  in  stabilizing 
market  conditions  and  eliminating  fluctuations,  is  after  all 
comparatively  little.  If  for  an  average  industry  the  statistical 
information  costs,  say,  $9,000  or  $10,000  a  year,  the  stimulus 
to  the  industry  would  be  sufficient  in  all  probability  to  bring 
the  cost  down  to  a  small  one-hundredth  of  i  per  cent  of  the 
benefits  derived  by  manufacturers,  merchants,  and.  customers 
in  improved  sales  and  market  conditions.  As  it  is  poor 
economy  to  try  to  save  money  when  procuring  medical  aid 
for  the  individual,  so  the  question  of  immediate  expense  should 
not  stand  in  the  way  of  getting  the  statistical  information  that 
will  improve  the  health  of  an  industry. 

Best  to  Begin  Modestly 

On  the  other  hand  it  is  neither  necessary  nor  desirable  to 
attempt  too  much  at  first.  It  is  not  suggested  here  that  an 
association  should  instal  an  elaborate  statistical  force  at  the 
outset.  It  is  better  to  begin  in  a  small  way;  then  as  the 
members  see  the  benefit  and  value  of  statistics  they  will  seldom, 
if  ever,  question  the  expense.  The  business  man  today  will 
never  hesitate  about  spending  a  dollar  if  he  can  see  that  he 
will  get  ten  or  twenty  times  that  much  in  return.  And  after 
statistics  have  been  developed  over  several  years,  it  will  be 
found  that  the  members  have  begun  to  appreciate  their  value 
and  will  be  willing  to  pay  a  reasonable  amount  for  their  fur- 
ther development  and  maintenance. 

Not  Necessary  to  Wait  for  Unanimity 

Moreover,  it  is  not  necessary  to  wait  until  all  members  of 
the  association  are  ready  to  participate  in  gathering  the  data. 
Some  association  members  think  that  statistics  compiled  by  an 
association  should  be  100  per  cent  complete,  and  that  unless 


2SO 


TRADE   ASSOCIATIONS 


every  member  in  the  association  is  participating  in  them  the 
statistics  are  worthless.     This  is  a  false  conception,  because 


(Retain,  Office 

Copy)  Attached  to  be  mailed  before 

or  on  „ 

Name 

Report  for  week  ending                  1 

Class 

Actual   Orders 
in  Ton.  rec'd 
during  week 

Actual  Orders 
in     Tons    un- 
filled on  hand 

•Actual  Tons 
(Net)  made 
during  week 

Actual  Tons 

shipped 
during  week 

Tons  of  Paper 

on  hand 
end  of  week 

•'Normal 

capacity  of 

finished  paper 

per  week 

High  Grade 

%^. 
4 

White,  Colored, 
Waxing 

^ 

o. 

Manila  and 
No.  2  White 

% 

Towel  and  Napkin 

/^ 

''%- 

Toilet 

*Net  product  shou 
constant  need  only    be 

d  be  machine  weightless  average  per  cent  of  firJehing  waste.            **NonnaI  productiDD  being 
stated    at  beginning  of   year  or    wh'-ntver    no-mai    production    may  change. 

Private   Inform 

ation.       To  be   mailed   before   or  on - 

Ntune 

Report  for  week  ending 

Clais 

Actual  Orders 
in  Tons  rec*d 
during  week 

Actual  Orders 
in     Tons    un- 
Klledonhand 

•Actual  Tons 
(Net)  made 
during  week 

Actual  Tons 

shipped 
during  week 

Tons  of  Paper 

on  hand 
end  of  week 

'•Normal 

capacity  of 

finished  paper 

per  week 

High  Grade 

White,  Colored, 
Wasing 

Manila  and 
No.  2  White 

Towel  and  Napkin 

Toilet 

*Net  product  ehou 
constant  need  only    be 

d  be  machine  weight  lest  average  per  cent  of  finishing  waste.            **Nomal  production   being 
stated    at  beginning  of   year  or   whenever    normal    production   may  change. 

Form  9.     (a)   Member's  Weekly  Report  (face).    (Size  5>^  x6^.) 

statistics  are  not  like  a  cost  system ;  the  aim  in  compiling  them 
is  not  to  prepare  a  record  of  every  item  as  produced  or  mar- 
keted  by   the   industry.      Their  purpose   is   merely   to   show 


STATISTICS   AND   THEIR   USE 


251 


trends.  The  best  statistical  practice,  therefore,  would  indicate 
that  60  per  cent  of  an  industry  participated  in  a  report,  the 
record  is  complete  enough  statistically  to  give  every  member 
very  valuable  information  about  market  trends. 


RECEIVED :                                \ 

PLACE  THIS  CARD 

ON  OFFICIAL  DESK  SAME  DAY 

DUPLICATE  IS  MAILED 

OFFICE  REPORT 

to  be  retained 

Form  9.     (b)   Member's  Weekly  Report  (reverse) 
Right  half  constitutes  back  of  upper  part  of  Form  9a  and  is  of  the  same  size. 

Nevertheless  all  members  should  be  urged  to  participate 
for  the  more  facts  obtained  the  better  the  statistics  will  be; 
and  as  a  matter  of  simple  reciprocity  no  member  should  be 
willing  to  receive  information  without  contributing  his  quota. 

Useful  Forms  for  Member's  Reports 

The  best  system  to  follow  for  the  initial  reports  of  mem- 
bers is  to  have  them  given  in  on  cards,  which  are  simple  and 


252  TRADE   ASSOCIATIONS 

readily  handled.  The  form  of  the  cards  may  be  somewhat  as 
follows  as  shown  in  Form  9.  They  should  be  made  in  duplicate 
with  a  perforated  division  so  that  when  one  copy  is  mailed  to 
the  association  the  duplicate  report  is  retained  by  the  mem- 
ber. 

Return  envelopes  in  which  the  cards  will  fit,  with  the 
regular  association  address  printed  thereon,  should  be  fur- 
nished to  each  member. 

Rules  should  be  given  to  the  members  as  to  how  to  make 
out  the  reports  which  in  the  beginning  should  be  as  simple  as 
possible,  and  which  should  read  somewhat  as  given  in  the 
following: 

Rules  for  Compiling  Weekly  Reports 
General 

1.  Separate  your  production  into  the  distinctive  classes  as  indicated 
on  the  cards. 

2.  Report  each  class  separately  on  the  card. 

Production 

Normal  Capacity  in  Tons  of  Finished  Paper  Per  Week.  To 
determine  your  normal  weekly  production  of  a  given  class  or  kind  of 
tissue  paper,  select  weeks  only  in  which  your  tissue  machine  or 
machines  ran  full  for  the  entire  week.  Take  six  of  your  best  weeks 
in  1913  and  six  of  your  best  weeks  in  1914,  six  of  your  poorest  weeks 
in  1913  and  six  of  your  poorest  weeks  in  1914.  Always  bear  in  mind 
to  deduct  any  finishing  waste,  if  there  is  any.  This  gives  a  total 
production  for  24  weeks.  Divide  this  total  by  24  and  multiply  the 
quotient  by  50.  This  gives  your  normal  annual  production,  allowing 
two  weeks  for  shut-downs  and  holidays.  Divide  this  result,  your 
annual  production,  by  52.  This  gives  your  normal  production  in  tons 
of  tissue  paper  per  week. 

Note.  The  above  weeks  may  be  selected  anywhere  in  the  given 
year  and  need  not  be  consecutive. 

Actual  Tons  (Net)  Made  During  Week.  To  determine  your 
actual  net  tons  production  for  a  given  week,  take  the  machine  weight 
of  actual  net  tons  made  during  that  week  and  subtract  average 
percentage  of  finishing  waste. 


STATISTICS   AND   THEIR    USE  253 

Orders 

Orders  Received.  All  orders,  when  the  specific  amount  and  actual 
date  for  shipment  is  given,  are  to  be  reported  in  the  week  received. 

Contracts  or  Standing  Orders.  Contracts  or  standing  orders 
should  not  be  reported  when  received,  but  only  when  a  requisition 
for  actual  shipment  is  made.  Then  that  order  or  requisition  should 
be  included  in  "Orders  Received"  for  that  particular  week  in  which 
the  requisition  is  received  as  well  as  in  "Shipments"  for  that  week. 

Shipments 

Tons  Shipped  During  Week.  Care  should  be  taken  in  checking 
each  invoice  of  shipments  so  as  to  give  the  actual  net  tons  invoiced 
each  week. 

On  Hand 

Tons  of  Paper  on  Hand.  Determine  the  tons  of  paper  in  both 
jumbo  rolls  and  finished  which  you  have  on  hand  by  a  running  inven- 
tory, always  bearing  in  mind  that  the  average  percentage  of  waste 
is  to  be  deducted  from  all  unfinished  paper.  If  you  do  not  finish 
your  paper,  then  give  the  actual  tonnage  of  your  jumbo  rolls  on  hand. 

Mailing 

Report  should  be  mailed  each  week,  whether  mill  is  running  or 
shut  down. 

Mail  each  report  just  as  soon  as  possible  so  that  it  will  reach 
New  York  on  or  before  each  Friday, 

Send  in  your  reports  regularly. 

If  a  report  is  delayed  send  it  just  the  same,  as  it  is  always  used  in 
revision. 

The  association  reports  are  mailed  from  New  York  every  Friday 
morning. 

It  is  desirable  that  the  cards  and  envelopes  should  have 
some  distinctive  color  for  quick  recognition  and  sorting  at  the 
association  office.  Each  member  should  be  sent  enough  report 
cards  and  return  envelopes  to  last  him  several  months. 

When  the  reports  are  received  by  the  association  tliey 
should  immediately  be  stamped  with  the  time  of  receipt.  They 
should  then  be  copied  on  a  large  work  sheet  which  has  on  the 
left-hand  column  of  the  page  the  names  of  the  members  who 
are  participating  in  the  report.     Opposite  each  name,  across 


254 


TRADE   ASSOCIATIONS 


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STATISTICS   AND   THEIR    USE  255 

the  page,  should  be  copied  the  member's  report  for  that  par- 
ticular week.  The  sheet  is  only  for  office  use  and  is  never 
published.  Form  10  gives  a  general  idea  of  the  form  which 
might  be  used: 

Late  Reports 

As  the  members  should  be  instructed  to  mail  their  reports 
to  reach  the  association  office  on  a  specified  day,  all  reports 
should  be  checked  when  the  last  mail  for  that  day  comes  in. 
Those  members  who  have  not  reported  should  be  wired  to, 
and  if  possible  a  report  from  them  should  be  obtained  by  wire. 
A  printed  form,  similar  to  Form  11,  should  be  sent  by  mail  to 
remind  them  that  their  report  has  not  been  received. 


MERCHANTS  ASSOCIATION 
—  St.,  New  York 192 


We  regret  your  Report  for  the  four  weeks  ending 

did  not  reach  us  in  time  to  be  included  in  our  association  report 
for  that  period. 

We  hope  your  report  is  on  the  way.  If  not,  that  you  will  send 
it  as  it  will  be  used  in  revision. 

We  would  appreciate  your  mailing  us  these  reports  regularly  and 
promptly  so  as  to  reach  New  York  City  not  later  than  the  Wednes- 
day   following  each  period. 

Very  sincerely  yours, 

Secretary. 


Form  II.     Reminder  of  Non-Receipt  of  Report.     (Size  55^x314) 

If  a  report  from  a  member  is  too  late  to  get  into  the  regular 
association  report  for  a  given  week,  the  member  should  never- 
theless be  urged  to  send  in  his  back  report,  or  reports,  in  order 
that  they  may  be  incorporated  in  the  revised  reports  for  the 
earlier  week  to  which  they  belong.     In  this  way  a  historical 


256  TRADE   ASSOCIATIONS 

record  is  built  up  which  is  valuable  as  a  basis  for  showing 
trends.  But  every  member  should  be  constantly  urged  to  get 
his  reports  in  regularly  and  early. 

Analyzing  Reports 

When  the  members'  reports  for  a  certain  period  have  been 
received,  they  should  be  analyzed  carefully  by  the  statistician 
to  see  if  each  report  looks  consistent.  Frequently,  through  a 
stenographic  or  clerical  error  on  the  part  of  an  employee  of 
the  member,  one  cipher  too  many  may  be  added  to  some  par- 
ticular item  on  the  report,  or  an  even  more  serious  mistake 
may  be  made.  At  this  point  one  of  the  principal  values  of  a 
statistician  appears — knowing  the  industry  closely  he  can  im- 
mediately recognize  the  inconsistency  of  the  report  and  wire 
the  member  for  verification  or  correction. 

When  it  is  determined  that  all  the  members'  reports  as 
received  are  correct,  the  totals  may  be  drawn,  percentages 
computed,  and  the  association  report  issued  to  the  members. 

Uniform  Comparison 

If  a  report  is  given  for  one  week  as  compared  to  previous 
weeks,  such  comparisons  should  always  be  made  from  the 
same  companies.  For  instance,  you  cannot  draw  a  proper 
comparison  between  20  companies  reporting  the  first  week  of 
a  month  and  20  companies  reporting  the  last  week  in  the 
month  if  they  are  not  the  same  companies. 

Suppose,  for  example,  that  one  of  the  companies  included 
in  the  first  week's  report  makes  25  per  cent  of  the  product  of 
the  industry,  and  that  in  the  last  week's  report  there  is  substi- 
tuted for  this  company  a  smaller  one  making  only  2  per  cent 
of  the  product  of  the  industry.  Although  the  total,  20  com- 
panies, is  the  same  in  each  report,  it  is  obvious  that  the  first 
report  represents  23  per  cent  more  production  than  the  other. 
Since  this  fact  is  not  known,  a  correct  comparison  is  impos- 


STATISTICS   AND   THEIR    USE  257 

sible.  If,  therefore,  in  the  first  week  there  are  3  companies 
which  are  not  included  in  the  last  week's  report,  they  should 
be  eliminated  from  the  first  week's  report  in  order  to  reduce 
the  comparison  and  have  only  the  same  companies  compared. 
In  other  words,  all  comparisons  should  be  made  only  of  the 
same  plants,  mills,  or  merchants.  Furthermore,  no  absurd 
comparisons  should  be  made  such  as  comparing  the  production 
of  a  mill  with  the  sales  of  a  merchant.  The  two  things  are  not 
comparable  and  the  absurdity  of  attempting  to  compare  them 
will  immediately  be  recognized  by  a  statistician,  or  by  the 
experienced  business  man.  Sometimes  you  will  find  people 
endeavoring  to  make  such  comparisons  in  order  to  prove 
inferences,  though  the  attempt  is  as  absurd  as  to  compare  the 
product  of  an  apple  tree  and  a  cow.  Both  the  apple  tree  and 
the  cow  may  be  part  of  the  landscape  but  with  this  fact  their 
relation  stops. 

Essential  Information 

Care  should  be  taken  that  the  reports  do  not  contain  any 
information  which  is  not  essential ;  they  should  be  kept  simple 
and  vital.  Some  reports  contain  weather  conditions,  approxi- 
mate capacity  production  figures,  and  similar  indefinite  or 
irrelevant  matters  which  serve  only  to  congest  the  report  and 
confuse  the  recipient. 

Accuracy  and  Promptness 

It  would  seem  almost  unnecessary  to  urge  that  the  two 
prime  requisites  in  connection  with  the  reports  are,  as  men- 
tioned in  the  previous  chapter,  accuracy  and  promptness. 

If  a  member  receives  several  inaccurate  reports  he  will  in 
a  short  time  begin  to  doubt  the  value  of  the  service;  and  no 
matter  how  many  accurate  reports  he  may  thereafter  receive, 
the  doubt  will  still  remain  in  his  mind.  Extreme  care  should 
be  taken,  therefore,  to  see  that  every  report  which  goes  out 


258  TRADE    ASSOCIATIONS 

is  not  only  neat  in  appearance  but  also  absolutely  accurate. 
Furthermore,  reports  should  always  be  issued  promptly.  If, 
for  example,  there  are  1 5  members  who  participate  in  a  report 
which  is  supposed  to  be  mailed  on  Tuesday,  and  if  only  5  of 
those  members'  statements  are  in  on  Tuesday,  the  report  should 
go  out  just  the  same.  Of  course  the  rule  of  reason  must  apply 
where,  for  instance,  there  has  been  a  general  delay  because  of 
some  condition  which  affects  all  mails;  but  as  a  rule  reports 
should  go  out  regularly,  so  that  every  member  may  confidently 
expect  a  report  on  the  morning  it  is  due.  It  is  a  great  thing 
to  have  the  members  anticipate  a  definite  report  on  a  definite 
day  once  a  week  or  once  a  month ;  nothing  discourages  and 
disgusts  a  man  so  much  as  slipshod  reports  which  come  to 
him  at  irregular  interA^als. 

Developing  the  Report 

After  the  initial  report  has  been  started  and  developed  it 
may  be  improved  upon,  first  by  arranging  the  data  in  specific 
groups,  and  then,  after  sufficient  facts  have  been  received 
covering  several  months,  by  setting  forth  the  information 
graphically.  Forms  12,  13,  and  14  show  various  ways  of 
utilizing  both  numerical  and  graphic  presentation. 

Individual  Records 

Every  member  is  anxious  to  know  exactly  how  his  business 
compares  with  that  of  his  competitors,  either  collectively  or  in 
a  group;  it  is  desirable,  therefore,  that  the  secretary's  office 
should  keep  a  large  individual  report  sheet,  the  same  as  the 
work  sheet,  for  each  member.  As  a  matter  of  precaution,  in 
case  someone  should  accidently  see  this  report,  the  name  of  the 
member  should  be  indicated  by  a  cipher  code.  When  the 
report  of  the  member  is  received  for  any  particular  week  it 
may  be  copied  on  this  sheet  for  that  week  and  then  under  it 
may  be  placed  the  total  reports  of  the  competitors  in  that 


STATISTICS    AND   THEIR   USE 


259 


26o 


TRADE   ASSOCIATIONS 


GRAPHIC  RECORD   OF   ORDERS 

wo 

130 
120 
110 
100 
<?0 
80 
70 
60 
50 

JAN. 

FEB 

MAR 

APR. 

MAY 

JUNE 

JULY 

AUG. 

SEPT 

OCT 

NOV. 

DEC 

JAN 

FEB 

MAR. 

APR. 

MAY 

JUNE 

140 
130 
120 

lie 

100 

qo 

80 
70 
60 
50 

1916 

1917 

A 

ORDE 
PROD 

JCTIO 

\ 



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JAN. 

FEB. 

MAR 

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MAY 

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JULY 

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SEPT 

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DEC 

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FEB. 

MAR. 

APR. 

MAY 

JUNE 

Form  13.    Association  Graphic  Record  of  Orders  Received, 

Graphic  lines  can  better  be 

group.  At  the  end  of  every  three  or  six  months  this  report 
may  be  sent  to  the  member  by  registered  mail,  thus  enabhng 
him  to  compare  his  own  record  of  accompHshment  with  the 
totals  for  his  competitors. 

Also  a  system  of  block  charts  making  this  individual  com- 
parison may  be  sent  to  him.    An  example  is  shown  in  Form  15. 

The  system  of  block  charts,  however,  takes  considerable 
time  to  compile  in  the  office  and  is  not  as  clear  as  it  might  be. 
The  line  system  of  graphic  comparison,  illustrated  in  Form  16, 
is  a  great  deal  better. 

Raw  Material  Reports 

After  an  orders-production-shipment  report  and  a  stock- 
on-hand  report  have  been  elaborated,  it  is  quite  desirable  to 
start  a  new  report  such  as  is  made  on  raw  materials.     Mem- 


STATISTICS   AND   THEIR   USE 


261 


MANUFACTURERS     ASSOCIATION 

NEW  YORK 


RECEIVED.  PRODUCTION. 8c  SHIPMENTS. 


Production,  and  Shipment.     (Size  27^x11.) 
shown  by  various  colors 

bers  are  very  much  interested  in  the  comparative  prices  which 
they  have  to  pay  for  raw  materials  and  this  information  is  of 
great  value  to  them.  When  a  raw  material  dealer  says  that  his 
prices  are  so  and  so  and  that  they  are  much  below  the  market, 
the  individual  member  very  often  has  no  way  of  knowing  what 
the  market  is.  If  he  turns  to  trade  papers,  or  even  to  news- 
papers, the  information  sometimes  is  not  so  full  and  accurate 
as  he  would  desire.  Now  if  he  only  knew  what  his  competitors 
had  paid  for  such  and  such  a  material  a  day  or  two  before  or 
a  week  before,  it  would  enable  him  to  judge  better  what  he 
ought  to  pay. 

Furthermore,  the  raw  material  dealer  will  urge  a  manu- 
facturer to  buy  some  particular  product  on  the  ground  of  an 
alleged  shortage  among  the  other  mills.  The  dealer  may 
insist  that  if  the  manufacturer  does  not  buy  at  once  somebody 


262 


TRADE    ASSOCIATIONS 


Southern  Pine  Association 


WEEKLY  TRADE  BAROMETER 


No.  237 


"  1/5-^  New  Orleans.  La..  Jan.  6.  1920. 

For  the  Week  Ended  Friday,  Jan-  2,   1920, 
146  MILLS  REPORT: 

CARS  TEET 

Orders  on  Hand 23,506  528,861,494 

Orders  Received  during  Week     2,265  50,960,235 

TOTAL 25,771  579,821,729 

Shipments  during  Week 2,802  63,042,198 

Balance  Orders  on  Hand 22,969  516,779,531 

For  the  week  (146  MILLS)                     totai,  p'^ImSI 

Orders           50,960,235  feet  349,043  feet 

Shipments 63,042,198     "  431,796   " 

Production 55,627,956     "  381,013    " 

Normal  Production  These  Mills 92,708,487     "  634,990    " 

Shipments  exceed  Production  for  the  week 7,414,242  feet   =  13.33% 

Orders  below  Production  for  the  week 4,667,721  "     -  8.39% 

Orders  below  Shipments  for  the  week .-...   12,081,963  "     -19.16% 

Actual  Production  below  Normal 37.080,531  "     =  40.00% 

Shipments  below  Normal  Production 29,666,289  "     =32.00% 

Orders  below   Normal  Production , 41,748,252  "     =45.03% 

Decrease  in  Orders  compared  with  last  report 12.081,963  "     =  2.28% 




PREVIOUS  REPORTS 

AVEBAGB 

ATEBAGE 

AVERAGE 

TOTAL 

A.wi£i  Utillltd 

EN^ 

T)      "p 

OBTINa 

OSOfM 

°TF«'ir™ 

PBODUCTION 

""cIb"" 

""(PeU)'" 

Oft 

10 

145 

339.228 

390,834 

513,336 

617,909 

20.328 

2,634,524 

17 

156 

381,412 

410,220 

475,397 

605,402 

18.606 

2,627,382 

24 

146 

385,658 

415,684 

488,861 

623,116 

17,831 

2,690,405 

.31 

138 

366,990 

427,810 

528,028 

629,274 

16.742 

Not. 

7 

158 

452,989 

411,580 

505,451 

619,867 

19.909 

2.775.793 

14 

146 

538,482 

444,787 

526,724 

638,908 

19.914 

3.024,064 

?1 

157 

684,053 

471,522 

520,898 

613,404 

21.750 

3.071,460 

28 

160 

769,472 

441,619 

.502,495 

603.387 

23,814 

3.299.876 

Dec 

5 

152 

865,069 

499,431 

514,007 

626,649 

24.128 

3.519.334 

12 

142 

488,007 

462,022 

484,223 

643,352 

23,309 

3.693,163 

19 

131 

507,000 

441,908 

489,865 

645,132 

22,503 

3,864,847 

26 

133 

357,108 

306,020 

305,042 

648.367 

21,730 

3,675,964 

Jan. 

2 

146 

349,043 

431,796 

381,013 

634,990 

22.969 

3,539.586 

22,499  reel  Is  lued  i 

s  baala  for  carload  belnl  averafe  load  ihlpped  In  NoTember. 

I  0R0£« 


c^l^r^ 


WEEKLY    BAROMETER 

Raroraeter  Indicates  percenlage  0. 
Production,  Orders  and  Shipmen' 
above  or  below  Normal  Prods 
tlon.  vblcb  Is  sfaowo  as  "Base,"  i 


Form  14.     Association  Weekly  Trade  Barometer.     (Size  Sj^xll.) 


else  will,  and  he  will  be  left  without  some  essential  material. 
If,  then,  the  member  knows  exactly  how  much  material  the 
other  mills  have  on  hand,  he  can  immediately  tell  whether  the 


STATISTICS    AND   THEIR    USE 


263 


MKnufacturers  association. 


comparative:  report  of  orders  received  and  production 


MEMBER  NO. 


REPOFTT  OF  GROUP  ■ 


DATE 


0RDER5  RECEIVED 


OROUP    AVtRAGt   TO  DATE "f, 

YOUR  AVERAGE  TO  OATt -J. 


JAN 

FEB 

MAR 

APR. 

MAY 

JUNE 

. 

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PRODUCTION 


Total   FVodut+ion     ^3 -Your  Production 


GROUP   AVERAGt  TO   DATE "fo 

YOUR    AVERAGE  TO  DATE "f. 


SIS 


7/. 

7, 

7a 

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APR. 


JUNE 


Form  15.    Association    Comparative   Report   of   Orders    and   Production. 

(Size  11^  X  15.) 


264 


TRADE   ASSOCIATIONS 


TRADL  ASSOCIATION  OF  THE  U.  S. 

STATISTICS 


GRAPHIC  RECORD  OF  PURCHASES,  SALES  AND  STOCK  ON  HAND 

Purchases . Sales S+ock  on  Hond. 


Member   No.. 


Sales 

_       1919 


JAN. 

FEB. 

MAR. 

APR. 

MAY 

JUNE 

JULY 

AUG. 

SEPT 

OCT. 

NOV. 

otc. 

1/0 

, 

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• 

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80 
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—^ — 

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50 
40 

30 
20 

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170 
160 
150 
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130 
120 

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70 

60 

50 

40 

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10) 

10 


JAN.     FEB.     MAR      APR      MAY   JUNE    JULY     AUG.  SEPT     OCT      NOV      DEC. 


Form  16.     Association  Graphic  Record  of  Purchases,  Sales,  and  Stock  on 
Hand.     (Size  8^  x  11.) 


STATISTICS   AND   THEIR    USE 


265 


dealer's  statement  as  to  a  shortage  in  that  particular  article  is 
true. 

Members  should  be  urged,  therefore,  to  send  to  the  secre- 
tary every  week  a  record  of  their  purchases.  The  objection 
may  be  made  that  the  purchases  will  be  so  numerous  that  it 


MANUFACTURERS  ASSOCIATION 


BOSTON ,     MASS. 


WEEKLY  RAW  MATERIAL  REPORT  FROM  MEMBER 


Name 

F\jrchases  for  week  ending . 


Dafe 


MATERIAL 


QUANTITIEIS     PURCHASEID 


DOMESTIC  FOREIGN 


PRICES-  DELIVCREO  AT  MILL 


[names    or   REGULAR     STOCK 


MATERIALS  GIVEN     HERe] 


Form  17.     Member's  Weekly  Raw  Material  Report.     (Size  8J/2XII.) 

will  be  too  much  trouble  to  report  them.  That  objection  is 
not  valid ;  no  matter  how  many  purchases  have  been  made  it  is 
entirely  practicable  to  make  a  report  of  that  kind  to  the  asso- 
ciation and  it  will  save  the  members  a  great  many  thousands  of 
dollars. 


266 


TRADE   ASSOCIATIONS 


Purchases  Reports 

When  this  information  in  regard  to  purchases  has  been 
received  by  the  association,  it  is  compiled  in  total  form  without 
giving  the  member's  or  seller's  names,  or  any  details  of  the 
purchase,  merely  stating  what  the  articles  are,  the  quantities 
purchased,  and  the  prices  paid.  If  several  articles  of  the  same 
kind  are  purchased  and  there  is  a  variation  in  price,  then  the 


MANUFACTURERS    ASSOCIATION 

5TREFT                                                                 1 

BOSTON    MASS. 

WEEKLY     RAW    MATERIAL 

REPORT 

RATF. 

NUMBER 

MFMRFIJ<;   PARTICIPATINrr 

NO.  MEMBERS 
REPORTING 

MATERIALS 

QUANTITIES  PURCHASED 

PRICES                    1 
DELIVERED     AT    MILL       | 

DOMESTIC 

FOREI&N 

HI&H 

LOW 

AVERAGE 

— — ^"^O-l 

1 

■^-^                                                                                                         , 

Form  i8.    Association  Weekly  Raw  Material  Report.    (Size  8^  x  ii.) 

high,  low,  and  average  prices  should  be  given.  This  is  in  no 
way  a  black  list  as  no  names  are  given,  nor  is  it  any  restraint 
of  trade.     It  is  only  a  matter  of  general  market  quotations. 

Forms  17,  18,  19,  and  20  illustrate  various  forms  of  pur- 
chases. 


Standard  Nomenclature 

It  may  be  necessary  to  issue  to  the  members  some  rules 
and  instructions  as  to  how  to  make  out  these  reports.     In  this 


STATISTICS   AND   THEIR    USE 


267 


CONFIDENTIAL 

RAW  5T0CK  SHEET  FOR  TANNER5-  5HEEP  AND  LAMB 


ON  HAND 

The  lost  day   of 


MONTHLY      STATEMEINT 

LEATHER       INDUSTRY 


TANNERS'  COUNCIL 

*1   PARK   ROW  NEW   YORK,   NY 


R«'Kjrn6  should  b<  morl- 
tA  promp+ly  0+  "the  end 
of  eoch  mon+h  in  H\€  en- 
closed   envelope 


SHEEP    AND    LAMB 


PACKER  OR   EQUIVALENT 


COUNTRY  OR    EQUIVALENT 


WOOL&KINS 


SHEARLINGS 


PICKLED  SHEEPSKINS 


PICKLED    LAMBSKINS 


DRY  SLATS 


IMPORTED   ROUGH  TAN 


OTHER 


SKIVERS 


FLESHERS 


Note:-    Sheep  hoirskins    should   no+  be  included  in  the  obove 


This  stub  is  to  be  detoched  ond  ploced  in  confidential  file  bjr- 


.  Stotisticion- 


Reported  by. 


.Street .City. 


. Stote . 


Form  19.     Monthly  Stock  Sheet  Report  from  Members.     (Size  Sj^xii.) 


268 


TRADE   ASSOCIATIONS 


STATISTICS    AND    THEIR    USE 


269 


case  it  should  be  particularly  specified  what  names  shall  be 
applied  to  the  various  items.  As  noted  in  Chapter  IX,  it  is 
important,  in  order  that  standards  may  be  set  up  for  regular 
purchases,  that  the  same  names  and  specifications  shall  be 
followed  throughout. 


SERVICE    BUREAU 


PITTSBURGH,     PA 


QUARTERLY  RAW  MATERIAL  INVENTORY  REPORT  FROM  MEMBER 


Nome . 

S+ock  on  hand  for  quor+er  ending 


Do+e. 


MATERIALS 


MATERIALS 


[materials    classified   and 


LISTED     mere] 


Form  21.     Member's  Quarterly  Raw  Material  Inventory  Report. 
(Size  8Hxii.) 

Inventory  Report 

Every  month  the  members  ought  to  report  what  stock  of 
raw  material  they  have  on  hand.     This  can  be  reported  back 


270 


TRADE   ASSOCIATIONS 


to  them  in  such  a  way  as  to  give  them  an  idea  of  just  how 
much  of  certain  materials  the  members  as  a  whole  have  on 
hand,  so  that  they  cannot  be  deceived  about  the  market  being 
long  or  short  on  some  particular  commodity.  This  point  is 
illustrated  in  Forms  21  and  22. 


SERVICE   BUREAU 


PITTSBURGH,  PA. 


QUARTERLY  INVENTORY  REPORT 


Inventories  for  quarter  ending  _ 
Number  members  participating. 


Date. 


NO. 
MEMBtRS 
REPORTING 


MATERIALS 


SAME     MEMBERS  THROUGHOUT 


(QUARTER    ENDING    QUARTER  ENDING 


TOTAL   MEMBERS 


QUARTER   ENDING 


Form  22.    Association  Quarterly  Inventory  Report.     (Size  8^4  x  11.) 

Labor  Reports 

One  of  the  most  valuable  reports  which  a  member  can 
receive  contains  information  relative  to  the  wages  paid  in  his 
competitors'  plants.     It  is  valuable  because  a  labor  delegation 


STATISTICS   AND   THEIR   USE 


271 


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272 


TRADE  ASSOCIATIONS 


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STATISTICS   AND   THEIR-  USE  273 

may  call  upon  him  and  state  that  the  employees  of  some  depart- 
ment want  an  increase  because  in  some  other  plant,  which  may 
be  several  states  away,  they  are  receiving  such  and  such  a  wage. 
If  the  employer  is  a  recipient  of  labor  reports  he  knows 
whether  the  delegation  is  speaking  the  truth. 

Each  quarter  the  members  ought  to  report  to  the  secretary 
what  wages  are  paid  to  every  employee  in  their  plants ;  that  is, 
not  to  the  employees  individually,  but  to  classes  according  to 
the  particular  kind  of  work  they  do.  They  should  also  report 
how  many  hours  each  class  is  working  and  any  other  specific 
information  which  is  desired.  A  form  for  such  a  report  is 
illustrated  in  Form  23. 

This  information  is  then  grouped  in  totals,  as  illustrated  in 
Form  24,  and  sent  back  to  the  members,  giving  the  high,  low, 
and  average  wage  paid  to  the  various  classes  of  employees. 

If  the  industry  is  national  and  if  the  groups  of  mills  are 
located  in  different  parts  of  the  country,  the  report  can  be 
arranged  by  groups  so  that  a  proper  comparison  can  be  made. 
Employees  of  mills  located  in  one  state,  say  Illinois,  may 
make  certain  claims  in  comparison  with  what  is  being  done 
in  Pennsylvania;  accordingly  the  reports  should  be  divided  in 
such  a  manner  that  the  members  can  easily  see  what  is  being 
done  in  each  locality. 

As  these  reports  are  most  important  in  settling  labor  dis- 
putes, they  should  always  be  sent  to  the  members  by  registered 
mail  and  treated  by  each  one  as  confidential.  There  need  be 
little  fear,  it  may  be  remarked,  that  the  information  will  be 
used  indiscreetly. 

Sales  Reports 

Sales  reports,  which  can  be  made  once  a  week  or  once  a 
month  according  to  the  nature  of  an  industry,  are  most  valu- 
able in  showing  the  general  condition  of  the  market.  In  some 
industries,  and  in  some  associations,  these  sales  or  contract 


274  TRADE   ASSOCIATIONS 

reports  are  made  in  detail,  as  is  shown  in  Chapter  XVIII.  A 
member  should  not  hesitate  about  giving  a  report  of  his  total 
sales  to  the  secretary;  no  other  member  is  going  to  see  the 
information  except  as  to  the  total  for  the  entire  industry,  or  for 
a  specific  group. 

It  is  extremely  valuable  as  well  as  interesting  for  an 
association  member  to  know  whether  the  sales  in  any  industry 
are  greater  this  month,  let  us  say,  than  those  of  last  month, 
for  by  this  knowledge  he  is  able  to  judge  the  trend  of  con- 
ditions. 

Individual  Reports 

At  any  and  all  times  the  association  should  be  prepared  to 
give  a  member  a  full  report  of  his  conditions  as  compared  with 
the  total  of  his  competitors  or  any  given  group  of  competitors; 
but  at  no  time,  of  course,  should  any  member  ever  be  shown 
the  report  of  another  member  without  the  specific  permission 
of  that  member.  Not  even  the  officers  of  an  association,  it 
may  be  remarked,  should  see  any  individual  reports  of  the 
members.  If  the  facts  thus  presented  are  confined  exclusively 
to  the  association  office  staff,  there  is  never  any  hesitancy  about 
giving  frank  and  full  information. 

Graphic  Reports 

The  desirability  of  getting  out  all  reports  possible  in 
graphic  form  has  been  mentioned  before.  It  is  necessary, 
however,  that  graphic  reports  shall  be  prepared  with  extreme 
care  and  only  by  a  statistician  who  knows  their  possibilities. 
For  example,  when  a  report  is  being  prepared  in  graphic  form 
a  moving  average  should  always  be  used  so  that  the  weekly 
or  monthly  fluctuations  will  not  make  the  report  look  too  much 
like  a  saw,  but  will  show  better  what  the  trends  are.  It  is  the 
trends  which  the  reports  should  especially  show. 

But  in  preparation  of  graphic  reports  and  of  all  the  more 


STATISTICS   AND   THEIR    USE  275 

refined,  detailed,  and  comprehensive  forms,  it  is  necessary  that 
people  who  have  a  thorough  knowledge  of  the  principles  and 
practices  of  statistics  shall  have  charge.  To  leave  this  to  a 
person,  however  well  meaning,  who  is  uneducated  in  statistical 
work,  is  throwing  away  time  and  money;  for  the  results  which 
the  members  accept  as  accurate  may  be  misleading  and  con- 
sequently dangerous. 

Exposition  by  Secretary 

For  every  meeting  of  the  association  large  graphic  wall 
charts  should  be  prepared  and  presented  before  the  members. 
The  secretary  in  his  report  should  explain  w^hat  the  charts 
mean,  what  tendencies  are  indicated  thereon,  and  such  other 
facts  as  are  of  interest  and  use  to  the  members.  He  should  be 
thoroughly  prepared  to  comment  on  market  conditions  as 
shown  by  the  information  thus  illustrated,  so  that  his  hearers 
will  go  away  with  a  clear  understanding  of  market  conditions 
and  carry  the  impression  straight  through  their  business 
transactions.  In  other  words,  the  secretary's  report  at  the 
meeting  should  endeavor  to  explain  and  emphasize  the  sig- 
nificance of  the  reports  which  the  members  have  been  receiv- 
ing, and  should  point  out  to  the  members  all  the  facts  of  mar- 
ket conditions  which  should  be  understood  and  used  by  them. 

The  Monthly  Letter 

As  not  all  members  are  able  to  attend  every  meeting,  a 
monthly  letter  should  be  compiled  by  the  association  and  sent 
out  in  printed  form.  This  letter  should  discuss  general  busi- 
ness conditions  as  they  relate  to  the  industry,  and  should 
analyze  the  conditions  within  the  industry  itself,  so  that  once 
a  month  each  member  will  receive  a  full  statement  in  regard  to 
both  general  and  specific  (Conditions.  The  letter  should  be 
written  in  simple,  direct  terms.  All  extracts  from  papers  or 
journals  should  be  reduced  and  compressed. 


276  TRADE   ASSOCIATIONS 

These  letters  should  be  of  the  same  form  as  those  issued 
by  banks  and  should  never  contain  over  four  pages  of  printed 
matter ;  they  ought  not  to  be  burdensome  to  read.  They  should 
be  printed  in  clear,  attractive  type. 

The  secretary  in  preparing  these  letters  should  use  only  the 
statistical  facts  he  has  available;  he  should  not  make  ex 
cathedra  statements.  If  he  desires  information  on  any  par- 
ticular subject  the  best  way  to  get  it  is  to  find  out  the  private 
opinions  of  various  members,  bankers,  or  experts,  and  then 
give  their  condensed,  collective  opinions.  A  member  should 
never  be  quoted  by  name,  as  some  other  member  may  object 
to  that  particular  member's  statements.  All  these  things  rest 
on  the  secretary's  judgment. 

Annual  Reports  and  Special  Reports 

Every  year,  of  course,  the  secretary  should  prepare  a  clear 
and  definite  annual  report  in  which  all  statistics  and  matters 
of  interest  in  the  industry  are  analyzed — a  report  which 
the  members  may  accept  as  a  kind  of  inventory  of  the  entire 
industry,  and  on  the  basis  of  which  comparisons  can  be  made 
year  by  year  as  to  the  growth  and  changes  which  have  taken 
place. 

From  time  to  time,  moreover,  the  secretary  of  some  com- 
mittee to  which  some  special  task  has  been  delegated  may 
issue  a  special  report. 

Right  Presentation  Essential 

The  question  is  sometimes  asked  as  to  why  it  is  difficult  to 
get  the  right  kind  of  secretary.  One  of  the  most  perplexing 
difficulties  is  to  get  a  man  who  not  only  can  run  an  association 
properly  and  keep  the  members  working  well  together,  but 
who  also  can  analyze  and  express  business  facts  both  in  ad- 
dressing a  meeting  and  in  writing  a  letter  in  such  a  way  that 
the  members  will  accept  them  in  the  right  spirit  and  base  their 


'STATISTICS   AND   THEIR    USE  '^'Jl 

judgment  and  actions  upon  them.  Every  secretary  should  be 
able  to  do  this.  And  yet  it  is  no  easy  thing  to  find  a  man  who 
by  endowment  and  qualifications  can  meet  these  requirements. 

Some  Principles  Reaffirmed 

In  this  chapter  no  attempt  has  been  made  to  set  forth  the 
principles  and  rules  of  compiling  statistics,  nor  to  set  up  a 
system  of  reports  which  would  apply  to  all  associations  or 
industries.  The  aim  has  been  merely  to  give  an  idea  of  how 
these  reports  may  be  developed.  Reports  which  will  fit  the 
needs  of  a  particular  industry  must  be  worked  out  by  the  asso- 
ciation that  represents  that  industry,  and,  since  the  members 
in  each  association  have  their  own  peculiar  problems,  how  the 
work  is  done  rests  with  their  own  ingenuity  and  ability. 

In  conclusion  it  may  be  repeated  that  when  the  reports 
are  issued  accurately,  promptly,  and  clearly,  they  will  become 
invaluable  to  the  members  and  resignations  will  become  a  thing 
of  the  past.  Members  cannot,  in  fact,  afford  to  do  business 
without  the  information  in  their  reports;  it  would  be  the  same 
as  proceeding  blindfolded.  When  a  member  realizes  that  facts 
alone  must  be  the  bases  of  his  judgment,  a  great  many  of  the 
difficulties  in  the  industry  will  smooth  out  of  themselves.  Fair 
competition  will  be  created,  customers  will  be  better  protected 
both  as  to  service  and  price,  and  everyone  will  benefit  by 
greater  prosperity  based  on  a  complete  understanding. 


CHAPTER  XVIII 

FAIR  PRICES 

Methods  of  Arriving  at  Prices 

There  are  three  methods  of  arriving  at  prices- 

1.  UnintelHgent  cutthroat  competition 

2.  Price-fixing  under  monopoHstic  conditions 

3.  Intelligent  co-operative  competition 

The  third  method  is  the  only  practical,  economic,  and 
enduring  way  in  which  fair  prices  can  be  arrived  at  and  stabil- 
ized. This  can  be  accomplished  through  a  trade  association. 
A  trade  association  becomes  indeed  an  economic  necessity  if 
continuing  fair  prices  are  to  prevail.  It  is  true  and  probable 
that  fair  prices  may  exist  for  a  time  where  they  do  not  result 
from  the  operation  of  a  trade  association,  but  they  will  in- 
evitably be  only  temporary  as  they  will  be  the  result  of  accident 
rather  than  of  intelligent  deduction. 

The  first  two  methods  of  arriving  at  prices  are  impractical, 
uneconomic,  and  unenduring.  In  fact  they  produce  unfair 
prices,  because  they  are  primarily  based  upon  selfish  motives. 
While  supply  and  demand  without  interference  would  elim- 
inate both  cutthroat  competition  and  price-fixing,  yet  in  the 
past  the  selfish  desires  of  those  wishing  greater  profits  have 
made  it  necessary  to  legislate  against  such  unfair  and  un- 
economic procedure  in  the  determination  of  prices. 

The  evils  of  unintelligent  cutthroat  competition  have  been 
set  forth  in  Chapter  III.  It  is  hoped  that  the  reason  as  to 
why  such  competition  is  undesirable  and  dangerous  to  all 
concerned  is  obvious  even  to  the  man  who  has  not  learned  its 
dangers  and  disasters  as  a  result  of  expensive  personal  ex- 
perience. 

278 


FAIR    PRICES  279 

Prices  which  take  into  consideration  only  the  producer  or 
the  distributer  are  inevitably  apt  to  be  unfair  prices.  Prices 
quoted  should  allow  to  the  seller  a  fair  margin  of  profit,  and  if 
no  speculation  comes  into  the  transaction  it  is  reasonable  to 
assume  that  the  goods,  when  they  reach  the  ultimate  consumer, 
will  be  at  a  fair  price ;  provided  the  price  has  been  made  in  a 
spirit  of  equity,  and  has  been  based  on  a  due  consideration  of 
costs  as  well  as  the  forces  of  the  competitive  market. 

The  Evil  Results  of  Price-Cutting 

Price-cutting  produces  losses.  Losses  have  to  be  made  up 
in  some  way  if  the  producer  or  distributer  is  to  stay  in  busi- 
ness. Therefore,  ultimately,  price-cutting  necessitates  that  the 
loss  shall  be  made  up  by  price  increases,  and  in  the  long  run  the 
ultimate  consumer  pays  more  than  he  would  where  a  constant 
stabilized  level  of  prices  exists  throughout  the  year.  Any  man 
would  rather  buy  goods  that  he  knows  have  a  reasonably  con- 
stant and  fair  value  than  goods  which  have  a  widely  fluctuat- 
ing price.  Of  course  if  he  is  a  speculator  it  is  quite  differ- 
ent, but  fortunately  speculators  are  comparatively  the  excep- 
tion. 

Price-Fixing  Economically  Wrong 

Price-fixing  is  both  economically  and  legally  wrong.  It 
was  practiced  l^y  the  old  monopolistic  pools  and  trusts  and 
had  to  be  legislated  against  although,  as  already  stated,  if  the 
law  of  supply  and  demand  had  been  allowed  to  operate  against 
such  pernicious  practice,  price-fixing  would  have  brought  about 
its  own  extermination. 

Opposition  to  monopoly  prices  arbitrarily  fixed  is  inherent 
in  the  very  nature  of  man.  Every  man  wants  his  independ- 
ence. In  thought  he  is  primarily  an  individualist.  Sub- 
consciously he  thinks  more  about  his  individual  self  day  by 
day  and  year  by  year  than  of  any  other  thing  in  life;  the 


28o  TRADE   ASSOCIATIONS 

instinct  of  self-preservation  is  an  evidence  of  this  underlying 
thought.  Therefore,  when  any  barriers  are  created  which 
detract  from  or  curtail  in  any  way  that  individualism,  they 
immediately  go  against  the  man's  nature,  and  whether  he  is 
conscious  of  it  or  not,  they  create  a  condition  against  which 
he  sooner  or  later  will  rebel.  Man  and  society  are  opposed  to 
monopolistic  impositions.  Trade  associations,  representing  the 
social  consciousness,  are  emphatically  opposed  to  anything 
which  in  the  remotest  degree  is  monopolistic. 

The  desire  for  self-expression  leads  every  individual  to 
seek  also  independence  of  action,  and  when  this  is  not  per- 
mitted because  of  certain  monopolistic  limits  which  other  men 
lay  down  for  him,  he  sooner  or  later,  if  possible,  will  break 
away  from  those  limits  and  go  his  own  way. 

When  a  group  of  producers  organized  or  even  proposed  a 
pool,  each  one  of  them  found  his  independence  and  self- 
expression  somewhat  abridged  in  the  manner  of  producing 
and  marketing  his  product ;  and  the  result  was  a  combination 
which  was  not  merely  illegal  in  the  eyes  of  the  law,  but  one 
which  could  not  long  endure.  As  soon  as  individual  activities 
were  limited  by  laying  down  hard  and  fast  monopoly  prices  at 
which  a  product  had  to  be  sold,  initiative  was  destroyed  and 
desire  for  individual  creative  expression  was  limited.  Sooner 
or  later  each  one  concerned  rebelled  against  the  imposition  and 
broke  away  from  the  agreed  plan.  Then  he  was  criticized 
severely  for  not  keeping  his  word  to  his  associates  in  the  agree- 
ment, recrimination  grew  sharp,  and  the  market  was  before 
long  in  a  state  of  chaos.  Is  it  any  wonder  that  under  such 
conditions  competitors  looked  upon  one  another  as  men  with- 
out honor? 

During  the  war  we  had  examples  of  price-fixing  by  the 
government,  but  these  were  only  emergency  measures  to  meet 
the  exigencies  of  the  occasion,  and  although  they  were  eco- 
nomically unsound,  everyone  during  such  a  crisis  was  willing 


FAIR   PRICES 


281 


to  sacrifice  his  individualism  for  the  sake  of  the  common  good. 
This,  however,  cannot  be  expected  of  human  nature  in  peace 
time. 

Price-Fixing  Legally  Wrong 

Price-fixing  is  legally  wrong.  Men  could  not  see  that  it 
was  economically  unsound  and  therefore  had  to  be  made  to 
see  it  by  the  enactment  of  laws  which  compelled  them  to  do 
what  was  right  for  their  best  interests.  The  Sherman  Law 
and  the  Clayton  Act  are  helps  rather  than  hindrances  to  busi- 
ness. They  compel  business  to  proceed  in  the  right  direction. 
These  laws  should  never  be  looked  upon  as  restraints  inflicted 
on  the  business  man  but  rather  as  aids  in  creating  a  condition 
in  the  market  whereby  he,  as  an  individual,  can  prosper.  Laws 
are  not  only  made  to  protect  the  people  in  general  but  to  pro- 
tect certain  people  in  particular  from  themselves,  and  the 
Sherman  Law  really  is  a  protection  not  so  much  of  the  ultimate 
consumer  as  of  the  producer  or  the  distributer.  If  the  law 
is  viewed  at  all  times  from  this  proper  angle  it  assumes  its 
correct  status. 

Sherman  Law  and  Clayton  Act  Not  Detrimental  to  Business 

The  trouble  is  not  in  the  Sherman  Law  and  Clayton  Act 
of  themselves,  and  not  in  their  purely  legal  interpretation  as 
handed  down  by  the  courts,  but  in  the  political  interpretation 
which  is  constantly  being  placed  upon  them  by  none  too  bril- 
liant office-holders.  The  average  man,  without  advice  of 
counsel,  knows  little  about  the  authority  which  is  vested  in 
individuals  to  enforce  the  law.  If,  as  too  often  happens,  some- 
one in  the  employ  of  the  government  comes  forward  mis- 
takenly with  the  assertion  that  a  certain  man  is  doing  wrong 
and  that  he  is  subject  to  indictment  and  conviction,  perhaps  to 
a  heavy  fine  or  imprisonment,  the  action,  however  well  meant, 
tends  to  create  in  the  minds  of  a  great  many  men  a  fear  of  and 


282  TRADE   ASSOCIATIONS 

almost  a  rebellion  towards  the  existence  of  these  laws  which 
relate  so  closely  to  business.  Whereas  there  is  nothing  in  the 
laws  to  be  feared;  there  is  nothing  in  them  which  does  not 
make  for  the  fullest  welfare  of  every  business  man  in  this 
country. 

Intelligent  Co-operative  Competition 

Since  fair  prices  cannot  be  the  result  of  unintelligent  cut- 
throat competition,  or  of  a  monopolistic  combination  which 
fixes  prices,  they  can  only  be  the  result  of  intelligent  co- 
operative competition;  and  such  desirable  competition  can 
result  and  continue  only  through  the  operation  of  a  trade  asso- 
ciation conducted  along  legal  lines,  which  acts  as  a  stabilizer 
of  the  market  and  naturally  tends  to  prudent  and  equitable 
procedure. 

A  trade  association,  in  its  relation  to  prices,  exists  for  a 
purpose  very  different  from  that  of  the  trust  or  pool.  The 
trade  association  accomplishes  only  the  stabilization  of  the 
industry  which,  for  the  benefit  of  all  from  producer  to  con- 
sumer, it  represents.  It  is  a  direct  and  positive  social  and 
economic  necessity.  By  putting  the  industry  on  a  basis  of 
sound  operation  through  an  interchange  of  accurate  costs,  an 
equitable  profit  for  all  concerned  in  the  manufacture  or  dis- 
tribution of  a  product  is  secured,  and  a  fair  price  is  guaranteed 
to  the  ultimate  consumer. 

The  association  does  not  exist  for  the  purpose  of  breaking 
the  law,  but  rather  for  the  purpose  of  preventing  people  from 
breaking  the  law ;  to  repeat  again,  it  exists  not  for  the  purpose 
of  fixing  monopolistic  prices,  but  for  the  purpose  of  keeping 
people  from  fixing  monopolistic  prices.  A  trade  association, 
therefore,  becomes  a  direct,  constructive  force  which  results 
in  the  observance  of  economic  and  statutory  laws.  It  is  a 
help  and  a  necessity  rather  than  a  hindrance  in  obtaining  prices 
that  are  fair  for  producer,  distributer,  and  consumer. 


FAIR    PRICES 


283 


Government  Cannot  Produce  Results 

It  might  be  thought  that,  if  fair  prices  result  from  such  a 
system  as  is  established  by  a  trade  association,  the  same  result 
could  be  brought  aljout  thrcjugh  some  agency  of  the  govern- 
ment. Anyone,  however,  who  has  had  any  experience  with 
governmental  agencies,  bureaus,  or  commissions  realizes  that 
this  is  impossible.  Each  industry  has  to  be  concentrated  upon 
as  a  unit  in  order  to  settle  its  problems  of  supply  and  demand, 
and  the  marketing  of  its  product.  If  the  United  States  govern- 
ment paternalistically  attempted  to  do  this  for  all  the  various 
industries  in  this  country,  it  would  require  an  organization  too 
large  and  too  unwieldy  by  far  to  give  the  direct  atten- 
tion which  would  be  necessary  to  produce  satisfactory 
results. 

Furthermore,  intelligent  co-operative  competition  is  the 
result  of  a  better  acquaintance  among  indi\'iduals  brought 
about  through  their  trade  association,  and  one  could  not,  even 
with  the  most  vivid  imagination,  picture  individuals  becoming 
friends  and  confidants  through  the  instrumentality  of  a  gov- 
ernment bureau. 

A  trade  association,  since  it  concentrates  its  attention  upon 
the  industry  which  it  represents,  is  the  only  possible  means  of 
bringing  about  desirable  social  and  business  results.  It  insures 
honesty  of  reports  to  the  association  and  accuracy  of  all  reports 
as  issued.  Also  it  provides  that  every  industry  in  issuing 
reports  shall  have  them  properly  interpreted,  and  this  demands 
undivided  study  and  attention  such  as  only  a  trade  association 
can  give. 

The  trade  association  becomes  more  or  less  a  collective 
mind  for  producing  the  best,  the  most  honest,  and  the  fairest 
market  conditions  through  its  usual  procedure  of  gathering 
fundamental  facts  and  opinions.  And  the  result,  as  has  been 
stated  before  in  this  book,  is  summed  up  in  fair  prices  to 
society. 


284  TRADE   ASSOCIATIONS 

Prices  and  the  Association 

How  does  the  trade  association  exercise  its  relationsliip  to 
prices?  To  all  intents  and  purposes  it  does  not  exercise  it  at 
all ;  the  relationship  is  purely  passive.  It  is  not  a  weapon,  but 
may  rather  be  likened  to  a  light  which  plays  steadily  upon 
malpractices  of  all  sorts,  and  under  which  the  malpractices 
disappear,  maladjustments  are  corrected,  and  fair  prices  re- 
sult. 

It  is  not  hard  to  see  that  this  result  would  be  reached  even 
if  the  members  of  an  association  got  together  purely  for 
social  purposes  and  business  were  never  mentioned.  The  very 
fact  that  competitors  do  become  better  friends  means  that  the 
tendency  to  undercut  each  other  is  minimized,  because  a  man 
comes  to  realize  that  by  trying  to  undersell  a  competitor  he 
may  be  ruining  himself. 

Dangers  Encountered 

It  is  true  that  some  associations  have  misunderstood  the 
relation  between  associations  and  prices,  with  consequent 
trouble.  The  possible  danger  lies  either  in  a  lack  of  apprecia- 
tion of  the  economic  limits  as  heretofore  set  forth,  within 
which  any  group  of  individuals  can  actively  work  for  fair 
prices,  or  else  in  ignorance  or  wilful  oversight  of  the  limits 
rightfully  imposed  by  law.  Unfortunately  there  are  many 
individuals  who  would  have  no  mental  scruples  in  doing  any- 
thing provided  they  are  not  caught,  but  as  a  rule,  the  vast 
majority  of  business  men  are  honest  and  want  to  do  what  is 
right  if  only  they  can  understand  the  reason  for  so  doing.  An 
association  is  at  fault  if  it  does  not  clearly  set  before  its  mem- 
bers the  real  economic  and  legal  reasons  for  treating  the  sub- 
ject of  prices  in  the  right  way. 

Some  people  claim  they  ought  not  to  join  a  trade  associa- 
tion at  all  because  it  is  concerned  with  prices,  but  a  negative 
attitude  toward  what  is  right  and  necessary  in  business  is 


FAIR    PRICES  285 

distinctly  unprogressive.  Far  better  for  him  to  belong  to  a 
trade  association  which  results  in  fair  and  equitable  prices  for 
the  particular  commodity  with  which  it  deals,  than  to  remain 
outside  and  let  his  prices  be  governed  by  any  wind  that  blows — 
to  be  placed  sometimes  in  a  position  where,  to  protect  his  very 
existence,  he  will  charge  an  unfair  price  to  the  ultimate  con- 
sumer. 

No  one  need  hesitate  about  belonging  to  a  trade  association 
because  of  its  favorable  influence  on  prices.  The  association 
is  simply  a  stabilizer  through  correct  information  and  in  no 
way  takes  away  from  the  individual  the  right  to  make  any 
price  that  he  may  wish.  But  as  everybody  who  is  in  business 
has  a  reasonable  amount  of  good  judgment,  the  result  is  that 
every  individual  in  the  light  of  correct  information  will  ask 
only  a  fair  price.  The  existence,  therefore,  of  trade  associa- 
tions because  of  their  favorable  influence  on  price  is  not  only 
necessary  but  commendable,  and  the  association  that  denies  such 
influence  is  the  one  immediately  to  be  suspected. 

The  Open  Price 

Let  us  now  pass  directly  to  a  consideration  of  how  trade 
associations  operate  in  their  relation  to  prices.  The  open  price 
is  the  mark  of  the  new  and  true  competition.  Truth  in  every- 
thing is  a  labor-saving  device,  whether  with  an  individual  or  an 
industry.  The  old  secret  price,  with  its  many  accompanying 
lies,  was  cumbersome  and  ineffective.  It  was  opposed  to  the 
rapid-fire,  straightforward  business  method  of  today  and  was 
simply  a  cloak  for  fraud,  deceit,  and  unfair  discrimination. 
It  fostered  distrust  between  seller  and  buyer  and  was  of  no 
advantage  to  either.  It  was  wasteful  and  wrong,  just  as  the 
open  price  is  economical  and  right. 

The  open  price  has  come  to  stay  and  is  growing  among 
business  men,  because  it  is  right  and  that  which  is  right  is 
bound  to  live  and  prosper;  whereas  that  which  is  wrong,  the 


286  TRADE    ASSOCIATIONS 

secret  or  the  fixed  price,  brings  about  eventually  and  quite 
often  painfully  its  own  failure. 

Price  Information 

The  interchange  of  prices  among  members  requires  first 
of  all  that  each  shall  know  his  costs.  Just  as  no  one  individual 
can  make  a  price  intelligently  without  knowing  his  costs,  no 
matter  how  many  years  of  experience  he  may  have  had,  so 
everyone  who  is  to  co-operate  in  the  exchange  of  reliable  in- 
formation must  base  his  information  not  on  guesswork  but 
on  facts  or  costs. 

In  the  second  place,  price  information  demands  that  the 
manufacturer  know  definitely  general  market  conditions,  such 
as  are  set  forth  by  the  right  kind  of  information  sent  to  him 
by  the  association.  With  a  knowledge  of  trends  of  the  mar- 
ket, and  with  a  knowledge  of  costs,  a  man  can  then  sit  down 
and  determine  exactly  what  his  own  prices  ought  to  be  in 
order  to  protect  himself  against  exigencies  and  to  allow  a 
reasonable  margin  of  profit.  When  he  has  established  these 
prices,  and  after  they  have  been  issued  to  his  customers,  he 
can  then  notify  the  association  and  the  association  in  turn  will 
notify  the  other  members.  It  is  much  better  for  a  member  to 
receive  this  correct  information  from  another  member  reg- 
ularly through  the  association  than  irregularly  and  often  in- 
correctly through  a  bargaining  customer. 

An  individual's  prices  should  never  be  made  with  any  con- 
sideration of  what  his  competitors  are  charging,  but  rather 
should  be  based  alone  on  costs  and  general  market  conditions. 
There  is  no  agreement  here ;  there  is  no  meeting  of  minds  or 
collusion.  It  may  be  surprising,  but  it  ought  not  to  be,  that 
when  everyone  uses  the  same  basis  for  the  judgment  of  his 
prices,  the  final  prices,  allowing  for  the  different  locations  of 
the  various  plants  and  their  different  natural  advantages  or 
disadvantages,  will  be  nearly  at  the  same  level. 


FAIR   PRICES 


287 


Open  Bids  or  Contracts 

A  number  of  associations  exchange  bids  through  the  secre- 
tary. When  several  companies  bid  on  a  contract  each  sends 
a  copy  of  its  bid  on  a  standard  form  to  the  secretary,  who 
opens  all  the  bids,  makes  a  copy  of  each,  and  when  all  are 
received  remails  copies  of  all  the  bids  to  the  members  who  sent 
him  bids  on  the  particular  contract.  If  any  member  after  he 
has  sent  in  a  bid  wishes  to  change  it,  he  is  morally  obliged  to 
notify  the  secretary  in  order  that  all  the  participants  may 
immediately  be  informed. 

The  members  who  bid  on  a  contract  therefore  know 
exactly  what  the  other  members  bid,  and  if  desirable  they  can 
get  together  afterwards  and  discuss  the  reasons  for  and 
against  various  estimates.  In  this  way  a  man  wdio  has  not  a 
correct  cost  system  is  shown  where  he  is  losing  money  or  is 
making  an  excessive  profit,  with  the  result  that  he  gets  a  better 
cost  system;  or  if  he  is  not  estimating  things  correctly,  he  is 
shown  the  error  of  his  ways  and  is  able  then  to  make  better 
estimates.  This  is  much  fairer  to  the  consumer  or  purchaser 
than  the  old  manner  of  blind  underbidding. 

Under  the  system  of  open  bids,  when  a  man  receives  the 
contract  he  feels  that  he  has  received  it  on  a  fair  and  equitable 
basis,  with  a  reasonable  margin  of  profit,  and  he  is  not  inclined 
then  to  save  the  profit  to  which  he  is  entitled  by  giving  the 
purchaser  inferior  service  or  material.  The  average  con- 
sumer is  willing  to  pay  for  what  he  gets,  provided  he  knows 
that  he  is  paying  on  a  fair  and  square  basis  and  the  open  bid 
or  open  contract  arrangement  makes  such  a  basis  perfectly 
possible  and  most  satisfactory. 

Sealed  Bids 

There  is  another  way  of  handling  the  bids  on  a  contract, 
and  that  is  by  sending  them  scaled  to  the  secretary.  In  this 
way  the  secretary  notifies  the  members  how  many  people  are 


288  TRADE   ASSOCIATIONS 

intending  to  bid.  If  for  example  there  are  six,  then  each  one 
sends  to  the  secretary  five  dupHcate  sealed  bids.  When  these 
are  received  by  the  secretary  from  all  six  members,  he  mails 
each  member  a  sealed  bid  from  the  other  five  and  thus  the  in- 
formation is  received  without  being  seen  by  the  secretary.  But 
such  secrecy,  of  course,  is  unnecessary,  because  if  the  members 
that  bid  on  a  contract  are  permitted  to  see  the  other  bids,  surely 
there  is  no  need  to  conceal  them  from  the  secretary.  More- 
over, this  procedure  is  rather  cumbersome  since  it  makes  it 
necessary  for  each  member  to  make  five  copies  of  his  contract, 
all  of  which  detailed  clerical  work  could  just  as  well  be  done 
by  the  association  office. 

Records  of  Contracts 

Many  associations  also  keep  a  record  and  a  copy  of  all 
contracts  made  by  members.  This  is  valuable  as  a  matter  of 
reference  in  making  future  bids  and  in  forming  a  basis  for 
general  judgment  of  market  conditions.  As  underlying  fac- 
tors in  the  market  will  change,  so  contracts  will  change,  and  if 
a  proper  history  to  show  future  trends  is  to  be  developed,  it 
is  therefore  necessary,  as  a  matter  of  record  and  statistical 
information,  that  all  contracts  should  be  preserved. 

Open  Prices  in  Operation 

In  a  number  of  associations  the  members  interchange  every 
day  their  prices  on  their  various  items.  This  information  is 
either  sent  in  by  mail  or  telegraphed,  and  is  remailed  to  all 
those  who  participate.  On  a  purely  reciprocal  basis  a  man 
who  does  not  send  in  such  information  does  not  get  any  in 
return. 

By  such  immediate  interchange  of  prices  the  market  is 
stabilized.  No  prices  are  suggested,  no  averages  are  advised, 
nor  is  influence  used  in  any  way.  Facts  are  given  and  the 
individual  can  do  anything  he  likes.     He  is  not  compelled  in 


FAIR    PRICES  289 


BRIDGE   BUILDERS   a   STRUCTURAL  SOCIETY 

INQUIRY 


Form  25.    Open-Price  Report — Member's  Report  Blank.     (Size  8x5.) 


BRIDGE    BUILDERS   a    STRUCTURAL   SOCIETY 

BLUE    TICKLER 


ICW    YORK 


PUEASE     REPORT     BELOW     Tt-fE      DISPOSITION     OF     THE     FOLLOWINa     WORK     ON      WHICH 
VEHE    LOW    BIDDER    IN    THE    SOCIETY 
eiO    MADE    ON    on    ABOUT 


ABOVE    DESCRIBED    WORK    WAS    LET    TO 


Form   26.      Open-Price    Report — Second    Report    from    Alembers. 
(Size  8x5.) 


290  TRADE   ASSOCIATIONS 

any  way  to  follow  these  prices ;  they  may  vary  in  any  degree. 
All  receive  them  for  the  purpose  of  knowing  exactly  what  is 
being  quoted  in  the  market,  and  this  is  done  in  order  that 
none  may  be  deceived  or  misled  by  any  false  reports  and  thus 


BRIDGE  BUILDERS  &  STRUCTURAL  SOCIETY 
Secretary's  Report  of  Order  Placed 

NEW    roRK. 

TO 

WEEK    OF 

PURCHASER 

DESCRIPTION 

ABSTRACT    OF 

WEIGHT 

ORDER    PLACED 

WITH 

PRICE    AND    TERMS 

REPORTED    BY 

Form  27.    Open-Price  Report — Association  Report  of  Order  Placed. 
(Size  8^x714.) 

endeavor  to  meet  competition  by  quoting  a  secret  or  false  price. 
Various   forms   for  open-price   reports  are   illustrated  in 
Forms  25,  26,  27,  28,  29,  30,  and  31. 

Market  Reports  of  Past  Prices 

A  great  many  associations  deal  in  commodities  on  which 
it  is  not  necessary — as  with  the  securities  listed  on  the  stock 


FAIR    PRICES 


391 


.2 
'o 

o 

3  o 


on  u. 
o 


e 

3 

<u 
be 


Ph 


Di 


Ph 


O 


o 


292 


TRADE   ASSOCIATIONS 


exchange — to  know  every  day  what  is  quoted.  Daily  in- 
formation is  necessary  only  on  any  commodities  that  daily 
fluctuate.     Seasonal  commodities  should  have  daily   reports 


BRIDGE  BUILDERS  &  STRUCTURAL  SOCIETY 
Report  of  Orders  Booked 


Tonnage  Sold 
or  Delivered 


Price  of 
Material 
Elected 


Form  29.     Open-Price  Report — Member's  Report  of  Orders  Booked. 
(Size  8^^x11.) 


BRIDGE  BUILDERS  &  STRUCTURAL  SOCIETY 

MontUy  Report  of  Material  Manufactireij  and  Shipiiienls 


Description  ol  Work 


Tonnage  MPd 
of  Member 


Form  30.     Open-Price    Report— Member's    Monthly    Report    of    Material 
Manufactured  and  Shipments.     (Size  8^  x  11.) 

during  the  selling  season.  But  on  general  mercantile  products 
it  is  not  necessary  that  such  information  be  distributed  more 
than  once  each  week,  or  fortnight,  or  even  month. 


FAIR    PRICES  293 

Form  for  Reports  Used 

It  would  be  impossible  to  suggest  within  this  book  the 
various  forms  that  may  be  used  for  reporting  past  prices,  as 
every  industry  deals  in  a  dissimilar  commodity  and  therefore 
report  forms  of  past  prices  have  to  be  made  distinctive.  But 
there  are  one  or  two  general  principles  which  should  apply. 


BRIDGE  BUILDERS  A  STRUCTURAL  SOCIETY 
50  CHURCH  STREET.  NEW  YORK 


Report  of  Tonnage  of  Contract!  Cloied  for  Month  of- 
From— — 


Thin  report  li  mode  «nh  the  un(l«.nti<lii.|l  that  the  InlormaUon  here  »lven   will  be  ujed  only  In  coroblnatkin  with 
limilar  reporu  mide  by  competitor,  lot  Kati.Ucal  purposes  .nd  will  not  be  diKloMd  In  detail  or  alono  to  any  person. 


Form  31.     Open-Price  Report — Member's  Monthly  Report  of  Tonnage  of 
Contracts  Closed.     (Size  8^  x  11.) 

The  report  should  always  state  that  the  prices  were  quoted 
for  some  definite  previous  period ;  it  should  be  signed  with  the 
company  name  and  the  name  of  an  authorized  official  of  the 
company,  and  should  be  dated.  All  essential  information  as 
regards  differentials,  extra  charges,  freight,  etc.,  should  be 
indicated  on  the  report. 

The  report  should  also  have  printed  thereon  that  any  prices 
or  quotations  which  are  given  are  offered  voluntarily  for  a 
previous  period  by  the  company  reporting;  that  the  secretary 
guarantees  that  the  copy  is  an  exact  reproduction  of  the  report 
as  received  by  him  from  this  member;  and  that  this  original 


294 


TRADE    ASSOCIATIONS 


report  is  at  the  office  of  the  association  for  the  inspection  of 
any  member  that  has  participated  in  the  report,  or  of  any  pubHc 
official  who  in  the  performance  of  his  duties  is  legally  author- 
ized to  investigate  the  workings  of  the  association. 


REPORT  FROM  MEMBER  TO  MEMBERS     —     GROUP    C. 
PAST  MARKET   TRANSACTIONS 


•  Sec'y. 


For    Informa+ion   of    Members   only 

Members    Name. 


Philadelphia,   Pa 
The  followinq  were  our  prices  +o  +hc   Merchan+a  . 


nz 


NAME.     8c     SHAPE 


QUANTITY 


FLAT 
PRICE 


CHANGES 

FROM  LAST 

REPORT 


NOTE. — The  foreieing  qooUtioBi  are  ibe  price*,  wkicJi  were  uked  inilepeiidcDtly  la>i 
tbal  ihcie  qooUtioiii  are  «a  exact  tTaii»criptioB  of  report  received  bj  bua  from  thii  ta 
participatJDf  la  Ibit  report,  or  "any  pnblir  official  wbo,  io  the  performance  of  Lii   Jut 

A»  rcfardi  thU  report  oeitber  the  Ai»ociatlon  nor  aoy  of  iti  officer!  have  m 
hf  any  qnotationi  appeariot  in  ibit  rcporl,  which  i*  merely  tent  to  thoic  wbo  wjih   to 

Thii  report  U  eoly  mailed  to  thote  membert  participatiDg  id  Ibii  moDtUy  rt 
cftiiditiaiii  u  Aa  report  to  he  copied  in  fdl  or  io  part,  or  ihown  to  any  cuitomer. 


month  by  the  companiei  rcpreiented  m  tbU  rcporL     The  Secretary  cnarantces 

mfaer,  which  report  u  on  file  at  bis  office  for  the  iaipectioB  of  any  memhcr 

:i.  ii  legally  authorized  Io  inveitigale  the  workingi  of  the  Aiiociabon." 

it  any  comment     No  p^auipant  or  any   member   of  the  Aitociation  U  bound 

otefchanse  luch  facts  for  their  infotmalioD  abont  patt  market  conditioBi. 

ort  aod  Mxou\i  be  trtatcd  by   recipient*  ai  abiolutdy  confidentiaL      Under  no 


Signature 


Date 


By. 


Form  32.     Report  from  Member  and  to  Members;  Past  Market 
Transactions.     (Size  8^  x  11.) 


Members,  of  course,  should  be  furnished  with  blank  report 
forms,  as  illustrated  in  Form  32,  to  be  filled  out.  The  associa- 
tion may  then  copy  their  reports  on  similar  forms  and  send 
copies  to  the  participants. 


FAIR    PRICES  295 

As  a  matter  of  reciprocity  the  reports  should  be  mailed 
only  to  those  members  who  participate  and  should  be  treated 
by  them  as  absolutely  confidential.  Under  no  conditions 
should  they  be  copied  in  full  or  in  part,  or  made  public  prop- 
erty, without  the  permission  of  the  member  sending  in  the 
report. 

Averaging  Prices  Not  Allowable 

No  comment  should  ever  be  made  on  a  report  by  the 
secretary  or  by  any  officer  of  the  association,  and  no  partici- 
pant or  member  of  the  association  should  feel  in  the  least 
bound  by  any  quotation  that  appears  in  the  report. 

A  case  in  point  came  up  in  the  Missouri  courts  against  the 
Yellow  Pine  Manufacturers  Association  several  years  ago. 
The  secretary  had  received  price  reports  from  the  members 
and  from  them  had  selected  arbitrarily  certain  reports  from 
which  he  averaged  the  rates  and  sent  this  average  on  a  current 
price  sheet  to  all  the  members. 

This  practice  the  Supreme  Court  of  Missouri  condemned 
as  a  "price-boosting"  device.  Had  the  secretary  simply  pub- 
lished the  prices  and  allowed  the  members  to  draw  their  own 
conclusions  this  action  would  have  been  legal ;  but  when  he 
averaged  the  prices  for  the  various  items  he  began  to  dictate  or 
suggest  what  the  prices  should  be. 

Therefore,  if  the  current  prices  of  the  different  members 
are  merely  published  without  comment,  they  constitute  nothing 
more  or  less  than  a  market  report  such  as  is  daily  seen  in  the 
newspapers. 

Composite  Reports 

The  forms  in  which  the  association  may  send  out  this  past 
price  information,  however,  can  be  improved  and  simplified 
to  suit  the  case.  In  a  large  association  where  there  are  seventy 
or  eighty  members  that  exchange  information  as  to  their  prices 


296 


TRADE   ASSOCIATIONS 


FAIR    PRICES  297 

every  fortnight,  it  is  a  difficult  task  for  each  member,  upon 
receiving  seventy  or  eighty  different  price  lists,  to  analyze 
them  so  as  to  show  the  comparative  values  in  the  market.  In 
such  a  case  the  association  can  prepare  a  large  composite  sheet 
of  prices,  on  which  a  list  of  the  members  is  given  in  the  left- 
hand  column  and  the  prices  are  graded  across  the  sheet,  some- 
what as  in  Form  33. 

Discussing  Prices  at  Meetings 

The  uninitiated  often  feel  that  the  discussion  of  prices  con- 
stitutes one  of  the  main  activities  of  an  association.  It  has 
been  long  the  opinion  of  members  of  the  most  successful 
organizations  in  the  country  that  price  discussions,  although 
not  illegal,  are  of  little  value.  They  feel  that  the  development 
of  a  complete  system  of  statistical  reports  from  which  the 
members  can  keep  track  of  the  economic  fundamentals  of  the 
industry  together  with  current  conditions  of  the  market,  is 
the  most  important  aid  to  them  in  the  proper  conduct  of  their 
business. 

While  the  discussion  of  prices  or  quotations  at  meetings 
is  not  illegal  if  properly  done,  the  border  line  is  so  close  and 
the  speakers  are  so  apt  to  overstep  their  bounds  that  it  is  neces- 
sary for  all  discussions  on  this  subject  to  be  carefully  watched. 
When  the  discussion  becomes  in  the  least  questionable,  it 
should  be  shut  off  and  the  member  reminded  that  the  associa- 
tion desires  above  all  to  keep  within  the  letter  and  spirit  of 
the  law. 

The  shutting  off  of  such  discussions  must,  of  course,  be 
made  by  one  who  is  thoroughly  familiar  with  the  law.  Some 
associations  have  their  counsel  present  at  all  meetings  and  he 
naturally  would  be  in  the  best  position  to  give  advice  along 
this  line.  In  other  associations  the  chairman  or  the  secretary 
stops  any  improper  discussions. 

It  should  always  be  the  purpose  of  the  association  to  con- 


298  TRADE    ASSOCIATIONS 

duct  its  business  openly  and  frankly.  To  avoid  any  suspicion 
at  any  future  date  when  the  activities  of  the  association  might 
be  questioned,  a  stenographic  report  of  everything  that  is  said 
at  the  meeting  should  be  made  and  kept  on  file.  The  report 
itself  is  an  aid  toward  developing  the  work  of  the  association 
along  the  right  lines  because  it  compels  the  members  to  be 
careful  of  what  they  say. 

Three  Methods  Summarized 

It  should  be  acknowledged,  therefore,  that  fair  prices 
cannot  result  from  blind,  destructive  competition,  nor  yet  from 
secret  monopolistic  agreements.  They  can  result  only  from 
individual  judgment  and  intelligent  co-operation,  from  a 
knowledge  of  costs,  and  from  constructive  competition.  A 
trade  association  is  the  means,  and  the  only  means,  to  this 
legitimate  end.  It  aids  in  regulating  and  stabilizing  the  indus- 
try, resulting  in  better  quality,  better  service,  and  fair  prices 
to  the  public. 


CHAPTER  XIX 

THE  LAW  AND  THE  ASSOCIATION 

The  Sherman  Anti-Trust  Law 

The  Anti-Trust  Law,  commonly  called  the  Sherman  Law, 
has  been  on  the  statute  books  for  thirty  years,  and  yet  while 
all  business  men,  particularly  manufacturers,  have  heard  of 
the  law,  have  feared  its  effects,  and  have  spoken  of  and  about 
it  with  bated  breath,  many  of  them  have  never  read  it  or 
heard  it  read,  and  have  little  knowledge  of  what  it  really 
forbids.  Practically  all  that  most  men  know  about  the  Sherman 
Law  is  that  by  its  terms  they  are  forbidden  to  enter  into  an 
agreement  with  another  in  order  to  fix  the  same  prices 
for  their  product;  and  accordingly  they  seem  to  think 
that  by  reason  of  such  prohibition  their  profits  have  been 
impaired. 

The  Sherman  Law  and  Trade  Associations 

The  Sherman  Law  really  has  only  two  sections  relevant  to 
the  activities  of  trade  associations,  which  clearly  state  how 
far  co-operation  may  be  carried.  The  first  section  stipulates 
that  trade  between  the  several  states  may  not  be  restrained  by 
contract  or  combination.  The  second  section  states  that  no 
person  or  group  of  persons  shall  combine  or  conspire  to 
monopolize  any  trade.  The  law  fixes  a  definite  punishment  for 
such  violations. 

When  viewed  in  the  proper  light,  the  law  is  neither  new  nor 
such  a  dire  incubus  upon  business  as  some  people  seem  to 
believe.  Certain  laws  like  certain  individuals  have  to  be 
known  to  be  appreciated.  The  two  important  sections  of  the 
law,  as  suggested  above,  are  as  follows: 

299 


30O  TRADE    ASSOCIATIONS 

Section  i.  Every  contract,  combination  in  the  form  of 
a  trust  or  otherwise,  or  conspiracy  in  restraint  of  trade  or 
commerce  among  the  several  states  or  with  foreign  nations, 
is  hereby  declared  to  be  illegal. 

Every  person  who  shall  make  any  such  contract,  or 
engage  in  any  such  combination  or  conspiracy  shall  be 
deemed  guilty  of  a  misdemeanor,  and  on  conviction  thereof 
shall  be  punished  by  fine  not  exceeding  $5,000  or  by  imprison- 
ment not  exceeding  one  year,  or  by  both  said  punishments 
in  the  discretion  of  the  Court. 

Section  2.  Every  person  who  shall  monopolize  or  attempt 
to  monopolize,  or  combine  or  conspire  with  any  other  person 
or  persons  to  monopolize,  any  part  of  the  trade  or  commerce 
among  the  several  states,  or  with  foreign  nations,  shall  be 
deemed  guilty  of  a  misdemeanor  and,  on  conviction  thereof, 
shall  be  punished  by  fine  not  exceeding  $5,000  or  by  imprison- 
ment not  exceeding  one  year,  or  by  both  said  punishments 
in  the  discretion  of  the  Court. 

Observe  that  the  first  section  is  aimed  against  restraints 
of  trade  by  contract,  combination,  or  conspiracy  to  restrain 
trade ;  and  the  second  section  is  designed  to  prevent  monopo- 
lies, attempts  to  monopolize,  or  combinations  or  conspiracies  to 
monopolize.  Of  course,  although  these  two  things  inevitably 
coalesce  to  a  measurable  degree,  it  is  possible  to  be  guilty  of 
one  and  innocent  of  the  other. 

Origin  of  Trade  Laws 

In  order  to  obtain  a  thorough,  or  at  least  a  better,  under- 
standing of  the  reasons  which  actuated  Congress  to  the  pas- 
sage of  the  Sherman  Law,  it  might  be  instructive  to  take  a 
rapid  glance  at  the  early  law,  that  is,  the  common  law  of 
England. 

In  the  very  early  days  the  term  "contract  in  restraint  of 
trade"  was  applied  merely  to  contracts  by  which  a  man  bound 
himself  not  to  carry  on  his  business  or  calling  in  any  part  of 
the  kingdom  of  Great  Britain.     Such  contracts  were  declared 


THE   LAW   AND   THE   ASSOCIATION  3^1 

illegal  as  being  against  public  policy,  so  that,  in  order  to  avoid 
this  condemnation,  such  contracts  came  to  be  drawn  with  the 
notation  that  some  remote  part  of  the  land  was  excluded,  just 
as  today  in  this  country  we  draw  similar  contracts  and  except 
therefrom  some  remote  state,  or  some  state  with  a  scanty 
population,  Nevada,  for  instance,  or  Arizona. 

Monopolies,  on  the  other  hand,  originally  were  in  the 
nature  of  grants  from  the  Crown,  giving  to  some  individual 
the  sole  and  exclusive  right  to  deal  in  some  particular  com- 
modity. Eventually  these  grants  were  abolished  because  of  the 
evils  which  their  possession  created.    Some  of  these  evils  were: 

1.  The  power  which  such  monopoly  gave  to  the  one  who 

enjoyed  it  to  fix  the  price  and  thereby  injure  the 
public. 

2.  The  power  it  engendered  to  limit  production. 

3.  The  danger   of   deterioration   in   the   quality   of   the 

monopolized  article  which  it  was  deemed  was  the 
inevitable  result  of  the  monopolistic  control  over  its 
production  and  sale. 

Of  course,  the  above  evils  related  solely  to  monopolies 
created  by  grants  from  the  king.  As  a  consequence  of  their 
abolishment  a  new  scheme  called  "engrossing"  came  about, 
which  was  nothing  more  than  the  obtaining  by  an  individual, 
or  a  group  of  individuals,  of  a  large  proportion  of  the  trade  of 
some  commodity  by  means  which  were  considered  to  be  dis- 
honest, and  then  raising  the  price  to  the  consumer.  This  so- 
called  "engrossing"  was  later  also  legislated  against  and 
eventually  came  to  be  called  "monopolizing,"  from  which  we 
get  the  present  meaning  of  the  word. 

Finally,  after  a  long  term  of  years,  such  acts  as  constituted 
"engrossing"  came  to  be  considered  also  as  a  restraint  of  trade 
because  of  the  obstacles  which  such  acts  placed  in  the  regular 
course  of  trade. 


302  TRADE   ASSOCIATIONS 

Relation  of  Monopolies  and  Restraints  of  Trade 

From  this  short  history  we  see  plainly  how  closely  con- 
nected are  restraints  of  trade  and  monopolies.  The  legislatures 
and  the  courts  of  this  country  followed  closely  the  varied 
changes  in  the  laws  of  England  made  necessary  and  expedient 
by  the  changing  conditions  of  trade  and  civilization. 

The  general  result  in  England  of  the  acts  of  Parliament 
and  the  decisions  of  the  courts  was  that  freedom  to  contract 
and  to  abstain  from  contracting  and  to  exercise  every  reason- 
able right  incident  thereto  became  a  rule  of  law;  except  that 
the  individual  could  not  unreasonably  restrain  his  right  to  carry 
on  his  trade  or  business,  nor  could  he  restrain  the  free  course 
of  trade  by  contracts  or  acts  which  implied  a  wrongful  purpose. 

The  Rule  of  Reason 

The  United  States  adopted  the  same  rule,  and  in  the 
Standard  Oil  case  the  United  States  Supreme  Court  held  that 
this  rule  was  embodied  in  the  Sherman  Law;  hence  we  have 
the  so-called  "rule  of  reason,"  its  language  being : 

It  follows  that  it  was  intended  that  the  standard  of  reason 
which  had  been  applied  at  the  common  law  and  in  this 
country  in  dealing  with  subjects  of  the  character  embraced 
by  the  statute  was  intended  to  be  the  measure  used  for  the 
purpose  of  determining  whether  in  a  given  case  a  particular 
act  had  or  had  not  brought  about  the  wrong  against  which 
the  statute  provided. 

The  court  says  further,  that  Section  2  of  the  act  is  merely 
an  attempt  to  make  certain  that  no  method  or  scheme  to  re- 
strain trade  may  escape  the  condemnation  of  the  act,  and  is 
no  more  than  a  complement  of  the  first  section,  and  that: 

It  becomes  obvious  that  the  criteria  to  be  resorted  to  in 
any  given  case  for  the  purpose  of  ascertaining  whether  viola- 
tions of  the  section  have  been  committed  is  the  rule  of  reason 
guided  by  the  established  law  and  by  the  plain  duty  to  enforce 


THE   LAW   AND   THE   ASSOCIATION  303 

the  prohibitions  of  the  act,  and  thus  the  public  policy  which 
its  restrictions  were  obviously  enacted  to  subserve. 

In  the  same  case  the  court  states  that  the  necessity  for 
adopting  the  "rule  of  reason"  is  that  it  must  be  determined  in 
each  case  whether  or  not  the  effect  of  the  contract  or  com- 
bination restraining  trade  is  direct  or  indirect  upon  interstate 
commerce.     If  direct,  it  is  a  violation;  if  indirect,  it  is  not. 

In  the  American  Tobacco  Company  case  it  was  held  that 
such  contracts,  to  be  illegal,  must  be  "undue  restraints" ;  that 
is,  they  must  unduly  restrict  competition  or  unduly  obstruct  the 
due  course  of  trade,  or  they  must,  either  because  of  their 
inherent  nature  or  effect,  or  because  of  their  evident  purpose, 
injuriously  restrain  trade.  Thus  each  case  of  an  alleged  viola- 
tion of  the  act  must  be  decided  upon  the  facts  of  that  particular 
case,  and  in  considering  it  there  must  necessarily  be  many 
factors  which  enter  into  the  final  determination. 

In  the  opinion  of  the  Supreme  Court  of  the  United  States 
in  the  case  of  Eastern  States  Lumber  Association  it  is  stated 
that: 

The  Sherman  Act  has  been  so  frequently  and  recently 
before  this  court  as  to  require  no  extended  discussion  now. 
...  It  broadly  condemns  all  combinations  and  conspiracies 
which  restrain  the  free  and  natural  flow  of  trade  in  the 
channels  of  interstate  commerce.  It  is  true  that  this  court 
held  in  the  Standard  Oil  and  Tobacco  cases,  and  in  the  sub- 
sequent cases  following  them,  that  in  its  proper  construction 
the  act  was  not  intended  to  reach  normal  and  usual  contracts 
incident  to  lawful  purposes  and  intended  to  further  legitimate 
trade,  and  summarizing  the  meaning  of  the  Act  in  the 
Tobacco  case,  this  court  said : 

'Applying  the  rule  of  reason  to  the  construction  of  the 
statute,  it  was  held  in  the  Standard  Oil  case  that  as  the  words 
'restraint  of  trade'  at  common  law  and  in  the  law  of  this 
country  at  the  time  of  the  adoption  of  the  Anti-Trust  Act 
only  embraced  acts  or  contracts  or  agreements  or  combina- 
tions which  operated  to  the  prejudice  of  the  public  interests 


304  TRADE   ASSOCIATIONS 

and  unduly  restricting  competition  or  unduly  obstructing  the 
due  course  of  trade,  or  which,  either  because  of  their  in- 
herent nature  or  effect,  or  because  of  the  evident  purpose 
of  the  act,  etc.,  injuriously  restrained  trade,  that  the  words 
as  used  in  the  statute  were  designed  to  have  and  did  have  but 
a  like  significance." 

The  same  principle  was  affirmed  in  Nash  v.  United  States. 
The  court  in  the  Standard  Oil  case  construed  the  act  as 
intended  to  reach  only  combinations  unduly  restrictive  of  the 
flow  of  commerce,  or  unduly  restrictive  of  competition,  and 
illustrating  what  were  such  undue  or  unreasonable  combina- 
tions, it  classed  as  illegal: 

...  all  contracts  or  acts  which  were  unreasonably  re- 
strictive of  competitive  conditions,  either  from  the  nature 
or  character  of  the  contract  or  act  or  where  the  surrounding 
circumstances  were  such  as  to  justify  the  conclusion  that  they 
had  not  been  entered  into  or  performed  with  the  legitimate 
purpose  of  reasonably  forwarding  personal  interest  and  de- 
veloping trade,  but  on  the  contrary  were  of  such  a  character 
as  to  give  rise  to  the  inference  or  presumption  that  they  had 
been  entered  into  or  done  with  the  intent  to  do  wrong  to  the 
general  public  and  to  limit  the  right  of  individuals,  thus 
restraining  the  free  flow  of  commerce  and  tending  to  bring 
about  the  evils,  such  as  enhancement  of  prices,  which  were 
considered  to  be  against  public  policy. 

In  Lowe  v.  Lawlor  the  Supreme  Court  held  that  a  com- 
bination to  boycott  the  hats  of  a  manufacturer  and  deter 
dealers  from  buying  them  in  order  to  coerce  the  manufacturer 
to  a  particular  course  of  action  with  reference  to  labor  organ- 
izations, the  effect  of  the  combination  being  to  compel  third 
parties  and  strangers  not  to  engage  in  a  course  of  trade  except 
upon  conditions  which  the  combination  imposed,  was  within 
the  Sherman  Act. 

In  Gompers  v.  Bucks  Stove  and  Range  Co.,  after  citing 
Lowe  V.  Lawlor,  the  Supreme  Court  said: 


THE   LAW   AND  THE   ASSOCIATION  3^5 

The  principle  announced  by  the  Court  was  general.  It 
(the  Sherman  Act)  covered  any  illegal  means  by  which 
interstate  commerce  is  restrained,  whether  by  unlawful 
combinations  of  capital,  or  unlawful  combinations  of  labor; 
and  we  think  also  whether  the  restraint  be  occasioned  by 
unlawful  contracts,  trusts,  pooling  arrangements,  black  lists, 
boycotts,  coercion,  threats,  intimidation,  and  whether  these 
be  made  effective,  in  whole  or  in  part,  bv  acts,  words  or 
printed  matter. 

But  in  order  to  show  a  combination  or  conspiracy  within 
the  Sherman  Act,  some  agreement  must  be  shown  under  which 
the  concerted  action  is  taken.  It  is  elementary,  however,  that 
conspiracies  are  seldom  capable  of  proof  by  direct  testimony 
and  may  be  inferred  from  the  things  actually  done,  and  when 
in  this  case  by  concerted  action  the  names  of  wholesalers  who 
were  reported  as  having  made  sales  to  consumers  were  period- 
ically reported  to  the  other  members  of  the  associations,  the 
conspiracy  to  accomplish  that  which  was  the  natural  conse- 
quence of  such  action  may  be  readily  inferred. 

In  other  words,  the  trade  of  the  wholesaler  with  strangers 
was  directly  affected,  not  because  of  any  supposed  wrong 
which  he  had  done  to  them,  but  because  of  the  grievance  of  a 
member  of  one  of  the  associations,  who  had  reported  a  wrong 
to  himself,  which  grievance  when  brought  to  the  attention  of 
others  it  was  hoped  would  deter  them  from  dealing  with  the 
offending  party. 

A  retailer  has  the  unquestioned  right  to  stop  dealing  with 
a  wholesaler  for  reasons  sufficient  to  himself,  and  may  do  so 
because  he  thinks  such  dealer  is  acting  unfairly  in  trying  to 
undermine  his  trade.  But,  as  was  said  by  Justice  Lurton, 
speaking  for  the  court  in  Grenada  Lumber  Co.  v.  Mississippi: 

When  the  plaintiffs  in  error  combine  and  agree  that  no 
one  of  them  will  trade  with  any  producer  or  wholesaler  who 
shall  sell  to  a  consumer  within  the  trade  range  of  any  one  of 
them,  quite  another  case  is  presented.    An  act  harmless  when 


3o6  TRADE   ASSOCIATIONS 

done  by  one  may  become  a  public  wrong  when  done  by 
many  acting  in  concert,  for  it  then  takes  on  the  form  of  a 
conspiracy,  and  may  be  prohibited  or  punished  if  the  result 
be  hurtful  to  the  public  or  to  the  individual  against  whom 
the  concerted  action  is  directed. 

The  gravamen  of  the  offense  in  the  case  from  which  the 
above  statements  are  quoted  consisted  of  a  scheme  under  which 
members  of  a  retail  lumber  dealers  association  reported  to  the 
secretary  of  that  association  sales  by  wholesalers  in  what  was 
regarded  as  territory  of  the  retailers.  The  secretary,  in  turn, 
made  up  and  distributed  to  the  members  of  the  retailers' 
association  a  list  of  the  names  of  such  wholesalers,  with  the 
purpose  of  compelling  the  retailers  to  refrain  from  dealing 
with  such  wholesalers,  and  while  it  was  not  shown  that  there 
was  any  agreement  among  the  retailers  to  adhere  to  any  such 
policy,  the  evidence  indicated  that  as  a  result  of  the  circulation 
by  the  secretary  of  such  lists  the  retailers  generally  refrained 
from  dealing  with  the  wholesalers  so  listed.  This  shows  why 
so-called  "black  lists"  are  illegal. 

The  Change  of  Attitude  Towards  "Big  Business" 

While  up  to  date  the  courts  have  laid  down  no  hard-and- 
fast  rules  by  which  one  may  decide  with  infallibility  whether 
a  given  course  of  procedure  is  legitimate,  yet  there  are  de- 
cisions which  state  positively  that  certain  things  may  not  be 
done,  and  others  which  point  the  way  to  transacting  business 
safely  in  co-operation  with  competitors.  That  there  has  been 
a  change  of  viewpoint  among  the  judges  and  the  rulers  of  the 
land  as  to  "big  business"  can  be  conceded. 

The  possession  of  a  bank  account  no  longer  causes  its 
owner  to  be  looked  at  with  suspicion ;  we  do  not  hear  quite  so 
much  about  malefactors  of  great  wealth;  unrestricted,  wide- 
open,  cutthroat  competition  is  no  longer  considered  to  be  the 
life  of  trade;  the  spirit  of  co-operation  is  beginning  to  be  en- 


THE   LAW   AND   THE    ASSOCIATION  Z^7 

couraged  and  the  right  of  invested  capital  to  secure  a  fair 
return  is  commencing  to  be  recognized. 

From  the  decisions  of  the  court  and  the  opinions  and  rul- 
ings of  the  Department  of  Justice  we  are  enabled,  moreover, 
to  know  with  reasonable  certainty  that  the  business  man  may 
do  certain  things  without  endangering  his  purse  or  his  liberty. 
But  there  are  many  things  he  may  not  do ;  and  it  is  a  safe  rule, 
therefore,  if  a  man  is  in  doubt  about  any  proposed  scheme,  to 
decline  to  participate  or  enter  into  it  until  he  has  been  advised 
by  someone  who  has  made  a  special  study  of  such  decisions 
and  rulings  as  would  cover  the  scheme  he  is  considering. 

Of  course,  having  acted  under  advice  of  counsel  does  not 
excuse  a  violation;  but  it  is  a  mitigating  circumstance,  and 
since  counsel  would  not  care  to  be  held  responsible  for  poor 
advice,  he  is  apt  to  err  on  the  safe  side  in  order  to  preserve 
himself  as  well  as  his  client  from  a  possible  sojourn  in  a 
"warmer  clime." 

Application  of  the  Law 

There  has  been  a  decided  change  in  the  attitude  of  the 
Department  of  Justice  toward  business  with  regard  to  the 
application  of  this  law,  and  as  a  result  there  is  a  slowly  grow- 
ing feeling  of  security.  Fortunately,  business  is  overcoming 
its  original  fear  regarding  this  law  and  no  longer  considers  it 
a  legal  cudgel. 

Some  of  the  things  which  under  the  Sherman  Law  an 
association  may  not  do  are  as  follows: 

1.  Association  members  may  not  agree  among  themselves, 

either  orally  or  in  writing,  directly  or  indirectly,  to 
have  a  common,  fixed,  and  unalterable  price. 

2.  Association  members   may  not   agree   to  limit   their 

output  or  allot  territory  in  which  to  confine  their 
sales  or  distribute  business. 


30^'  TRADE   ASSOCIATIONS 

These  restrictions,  however,  are  all  qualified  by  the  "rule 
of  reason."  If  a  course  of  conduct  has  no  appreciable  effect 
on  competition,  if  its  effects  are  remote  and  indirect  and  if  the 
ordinary  channels  of  trade  are  not  clogged  or  obstructed,  then 
such  conduct  is  deemed  by  the  courts  unobjectionable.  If  the 
chief  purpose  and  dominant  effect  of  the  action  of  a  trade 
association  are  to  foster  and  develop  business  without  unduly 
restraining  trade,  the  association  is  legally  safe. 

Some  of  the  things  which  under  the  Sherman  Law  an 
association  may  do  are  as  follows: 

1.  Its  members  may  agree  upon,   adopt  and  use  trade 

customs  relating  to  weights,  cjualities,  standards,  etc. 

2.  It    may    gather,    compile,    and    disseminate    statistics 

as  to  the  trade,  and  the  supply  and  cost  of  raw  ma- 
terials, including  total  amounts  sold  and  prices  at 
which  sold. 

3.  It  may  investigate  and  adjust  unfair  business  methods 

of  wholesalers,  jobbers,  or  customers,  as  the  case 
may  be,  and  may  adopt  a  uniform  cost  system. 

The  members  of  an  association  should  be  very  careful  to 
avoid  dealing  with  the  question  of  controlling  the  price  to  be 
paid  by  the  members  of  the  association  for  their  raw  materials ; 
or  the  price  at  which  the  members  are  to  sell  their  product; 
or  the  quantity  of  such  product  to  be  produced  by  the  members ; 
or  the  customers  to  whom  they  are  to  sell.  The  law  will  not 
permit  any  agreement,  expressed  or  implied,  as  to  the  quantity 
of  any  material  to  be  purchased,  in  the  aggregate  or  by  any 
individual,  or  as  to  the  price  to  be  paid  therefor;  nor  will  it 
permit  any  agreement,  expressed  or  implied,  as  to  the  quantity 
of  any  product  to  be  produced  in  the  aggregate  or  by  any 
individual,  or  as  to  the  price  to  be  charged  therefor;  nor  will 
the  law  permit  any  agreement,  expressed  or  implied,  having 
for  its  purpose,  directly  or  indirectly,  to  limit  the  territory  in 


THE   LAW   AND   THE   ASSOCIATION  3^9 

which  any  person  is  to  sell  or  to  buy,  or  limiting  anyone  as  to 
those  from  whom  he  will  purchase  or  to  whom  he  will  sell. 
Therefore,  in  the  conduct  of  the  affairs  of  the  association  the 
members  should  avoid  any  intercourse  from  which  the  deduc- 
tion would  be  drawn  that  there  had  been  any  agreement, 
expressed  or  implied,  in  any  of  the  above  respects. 

The  Clayton  Anti-Trust  Act 

The  Clayton  Anti-Trust  Act  and  the  Federal  Trade  Com- 
mission Act  throw  no  new  light  upon  the  meaning  or  inter- 
pretation of  the  Sherman  Law.  The  Clayton  Act  makes  it 
unlawful  to  discriminate  directly  or  indirectly  in  prices  be- 
tween different  purchasers,  when  the  effect  of  such  discrimina- 
tion will  substantially  lessen  competition  or  tend  to  create  a 
monopoly;  but  it  expressly  permits  a  discrimination  if  made 
in  good  faith  for  the  purpose  of  meeting  competition.  The  act 
also  provides  that  a  manufacturer  may  select  his  own  cus- 
tomers, if  he  does  so  for  proper  purposes;  but  it  forbids  the 
selling  to  the  customer  upon  an  agreement  that  he  will  pur- 
chase from  no  competitor,  provided  such  an  agreement  sub- 
stantially lessens  competition  and  tends  to  grant  a  monopoly. 

Federal  Trade  Commission  Bill 

The  Federal  Trade  Commission  Bill  declares  that  unfair 
methods  which  substantially  lessen  competition  are  unlawful. 
It  is  not  known  exactly  what  the  court's  interpretation  will  be 
of  the  phrase  "substantially  lessen  competition,"  or  of  "unfair 
methods  of  competition" ;  but  it  is  assumed  that  a  trade  asso- 
ciation that  proceeds  in  a  straightforward,  honest  manner, 
with  all  activities  fully  known  and  disclosed,  should  expect 
nothing  but  the  hearty  support  of  and  assistance  from  the 
Federal  Trade  Commission  and  from  the  departments  of 
Commerce  and  Justice. 

The  Federal  Trade  Commission  Act  can  be  of  great  value 


310  TRADE   ASSOCIATIONS 

to  the  honest  and  substantial  prosperity  of  this  country, 
provided  those  who  are  in  charge  of  the  activity  of  the  com- 
mission do  not  assume  the  attitude  of  a  quasi- judicial  body 
or  a  detective  bureau,  but  endeavor,  rather,  at  all  times  to  take 
a  broad,  constructive  view  of  the  big  business  problems  of  the 
nation.  While  investigating  and  complaining  against  business 
may  make  interesting  news  items  and  possibly  contribute  to  the 
reputation  of  certain  men  for  their  own  personal  aggrandize- 
ment, yet  in  time  it  so  disgusts  the  people  engaged  in  the 
business  under  fire  that  they  either  turn  to  other  products  or 
give  up  business  entirely.  Then  there  is  a  shortage  in  the 
product  manufactured,  and  the  public  suffers  in  the  end. 
Consequently  it  is  to  be  hoped  that  the  commission  will  look 
more  to  building  up  a  strong  trade  and  commercial  nation 
than  to  their  personal  reputations  as  investigators  and  assumed 
reformers. 

Observing  Speed  Laws 

The  existence  of  laws  prohibiting  people  from  doing  cer- 
tain things  is  no  reason  for  anyone  hesitating  to  organize  a 
trade  association.  There  is  no  law  or  reason  in  existence  to 
prohibit  any  individual  or  group  of  individuals  from  doing 
that  which  is  legally  and  economically  proper.  Anyone  who 
stays  out  of  an  association  because  of  his  fear  of  existing  laws 
must  either  be  a  coward  or  possess  a  guilty  conscience.  There 
is  such  a  thing  as  being  so  virtuous  as  to  appear  immoral. 

It  is  about  as  logical  to  refuse  to  organize  or  join  an  asso- 
ciation because  certain  laws  exist  which  prohibit  one  from  do- 
ing that  which  is  wrong,  as  it  is  to  refuse  to  ride  in  an 
automobile  because  certain  people  exceed  the  speed  limits. 
No  one  gets  into  an  automobile  for  the  purpose  of  running 
down  a  man  and  killing  him,  and  no  one  joins  an  association 
for  the  purpose  of  fixing  prices  and  producing  conditions 
which   are   illegal.      But  because   somebody  irrationally   has 


THE   LAW   AND   THE   ASSOCIATION  31 T 

broken  the  speed  laws  and  has  met  with  an  accident,  or  has 
killed  someone,  is  not  judged  by  the  average  man  as  sufficient 
reason  for  never  riding  in  an  automobile.  Similarly,  if  a  man 
joins  the  right  association  in  the  right  spirit  he  has  no  more 
to  fear  as  a  member  of  the  association  than  he  has  as  a  non- 
member.  And  very  often  people  are  looked  upon  with  sus- 
picion who  are  not  members  of  an  association  which  is  repre- 
sentative of  the  industry  of  which  they  are  a  part.  The  ques- 
tion is  often  asked:  "Why  are  they  not  members?  The 
members  of  the  association  do  things  in  the  right  way.  Are 
these  people  out  of  it  because  they  do  not  want  to  do  things 
in  the  right  way,  or  because  they  are  not  considered  the  proper 
sort  by  the  other  manufacturers  in  the  industry  and  so  cannot 
be  elected  to  the  association  ?" 

No  One  Suffers  by  Joining  the  Right  Kind  of  an  Association 

No  man  ever  came  to  grief  from  joining  the  best  kind  of 
a  trade  association,  which  was  conducted  in  the  proper  way. 
It  is  for  him  to  determine  beforehand  whether  the  association 
is  all  right  and  if  it  is  then  to  join  and  give  it  his  hearty 
support.  If  the  association  is  not  conducted  in  the  proper 
manner,  then  the  sooner  it  is  put  out  of  business  the  better. 
But  no  association  that  is  trying  to  do  the  proper  thing  should 
be  impeded  in  its  progress  by  the  refusal  of  a  number  of  people 
to  join,  with  the  mere  lame  excuse  that  there  are  at  present 
laws  in  existence,  or  even  people  interpreting  these  laws,  that 
might  at  some  time  cast  reflections  on  the  men  in  the  associa- 
tion. Let  men  be  men  and  do  what  is  legally  sound.  Then  if 
some  government  official  claims  that  they  are  not  doing  right, 
let  them  like  men  stand  up  and  defend  their  rights  as  inde- 
pendent American  citizens;  let  them  not  be  bluffed  into  sub- 
mitting to  any  regulations  or  arrangements  by  which  they 
either  directly  or  by  inference  admit  that  they  are  guilty  of 
something  which  they  have  not  done. 


312  TRADE   ASSOCIATIONS 

But  there  is  one  characteristic  of  human  nature  which  must 
be  considered.  Just  as  a  number  of  men  who  are  in  an  auto- 
mobile and  are  anxious  to  get  somewhere  are  very  often  Hable 
to  step  on  the  accelerator  and  go  beyond  the  speed  laws, 
especially  if  they  think  there  is  no  one  looking,  so  a  group  of 
men  in,  or  forming,  an  association,  when  they  want  to  get 
somewhere  quickly,  have  always  the  possible  temptation  to 
step  on  the  accelerator  and  break  the  state  or  federal  laws,  if 
they  think  they  will  not  be  caught.  That  is  what  the  associa- 
tion must  watch.  If  a  secretary  is  the  right  kind  of  a  secretary 
he  will  see  to  it — just  the  same  as  a  reliable  chauffeur  will  see 
to  it,  even  if  it  means  the  loss  of  his  job — that  the  laws  are  not 
broken  in  trying  to  attain  speed. 

Exchange  of  Prices 

The  exchange  of  prices  among  the  members  of  an  associa- 
tion, as  described  in  the  previous  chapter,  is  not  illegal  pro- 
vided such  an  exchange  is  not  accompanied  by  any  agreement 
or  arrangement  for  fixing  prices.  But  lest  some  members  be 
unduly  influenced  in  the  future  in  determining  their  prices,  the 
courts  have  concluded  that  groups  of  individuals  should  discuss 
only  prices  which  have  been  made,  i.e.,  past  prices. 

In  the  case  of  the  "Gary  dinners,"  there  is  a  danger  that 
whenever  an  individual  expresses  what  he  intends  to  do  in 
the  future  as  regards  his  prices,  somebody  may,  with  the  weak- 
ness of  human  nature,  say  that  he  would  like  to  do  the  same 
thing;  and  the  first  thing  that  one  knows  an  arrangement  has 
been  made  or  a  meeting  of  minds  has  occurred  at  least  by 
inference  which  does  affect  future  prices.  So  the  courts  have 
decided  that  an  association  must  be  very  careful  to  see  that 
prices  which  have  been  quoted  and  have  been  made  public  are 
the  only  ones  which  are  in  any  way  taken  into  consideration. 
A  past  price  is  a  past  price  of  course,  whether  it  is  an  hour 
old  or  a  century  old,  and  yet  it  is  better  that  a  price  shall  have 


THE   LAW  AND   THE   ASSOCIATION  3^3 

attained  at  least  some  fair  degree  of  maturity  before  it  be- 
comes a  matter  for  association  information. 

Exchange  of  Prices  Just  as  Legal  as  the  Stock  Market 

It  is,  however,  no  more  wrong  for  persons  in  an  industry 
to  keep  each  other  informed  as  to  what  they  have  quoted  than 
it  is  for  anyone  to  pubhsh  in  the  newspapers  the  prices  which 
he  is  charging  for  his  commodities.  We  see  such  prices  quoted 
in  advertisements  or  in  stock  quotations,  or  in  other  kinds  of 
market  reports.  If  a  man  were  to  be  prohibited  from  telHng 
another  man  what  he  is  charging  for  his  product,  we  should 
immediately  have  to  stop  labeling  goods  and  all  other  com- 
modities in  stores  where,  perhaps,  a  competitor  might  see  what 
was  being  asked  of  the  public  for  any  particular  article. 

What  the  Association  Legally  Can  and  Should  Do 

In  order  that  an  association  may  really  serve  the  purpose 
for  which  it  is  organized,  there  are  certain  things  which  it  can 
and  should  do.    These  things  may  be  briefly  stated  thus : 

1.  It  should  stabilize  the  market  through  an  interchange 

of  market  information,  costs,  sales,  etc.,  as  set  forth 
in  Chapter  XVIII. 

2.  It  should  strictly  supervise  its  members  in  order  that 

they  may  not  overstep  the  legal  limit,  or  be  guilty  of 
any  defection  from  the  aims  and  ideals  of  the  asso- 
ciation. 

Stabilizing  the  Market 

The  exchange  of  market  information,  is  not  made  as  a 
matter  of  curiosity  or  history,  but  is  done  because  of  the 
efficacious  result  on  the  future  market.  There  is  no  denying 
that.  If  such  a  statement  is  questioned,  let  it  be  asked,  as 
stated  in  the  previous  chapter,  which  is  better  for  all  concerned 
— the   manufacturer,   merchant,    and    ultimate   consumer — to 


314  TRADE   ASSOCIATIONS 

have  a  fluctuating  and  changing  market  all  the  while,  or  to 
have  a  market  that  is  continuously  stable,  reasonable,  and 
fair?  Stable  prices  benefit  the  ultimate  consumer  most  of  all. 
An  inquiry  shows  that  where  in  industries  by  a  legal,  in- 
telligent, and  sound  interchange  of  price  information  stable 
market  conditions  have  been  produced,  the  distributers  or 
ultimate  purchasers  of  such  a  product  of  an  industry  are  much 
better  satisfied.  They  have  become  convinced  that  the  intelli- 
gent interchange  of  price  information  among  the  members  of 
an  association  is  far  better  than  rumor  and  misinformation, 
which  produce  chaos  and  an  unstable,  unsatisfactory  market. 

The  Part  of  Costs  in  Fixing  Prices 

The  interchange  of  past  price  information  does  not  neces- 
sarily mean  that  a  man  receiving  it  is  compelled  to  do  anything 
that  he  does  not  want  to  do.  He  may  reduce  his  prices  in 
a  readjustment  just  as  often  as  he  may  increase  them.  The 
information  no  more  need  affect  his  prices  than  it  does  his 
costs ;  but  it  merely  gives  him  the  facts  which  he  should  have 
in  order  to  see  whether  or  not  he  is  marketing  his  product  in 
the  right  way.  It  may  make  him  investigate  his  costs  more 
carefully  and  thereby  discover  that  by  charging  too  little  he  is 
losing  money,  or  by  charging  too  much,  he  is  losing  business. 

As  mills  are  located  in  different  places  and  have  different 
physical  conditions  with  which  to  contend,  so  their  costs  dift'er 
and  consequently  their  prices  do  and  should  differ.  That  is 
exactly  one  of  the  reasons  why  it  is  so  absurd  to  establish  and 
fix  the  same  prices  for  all  manufacturers. 

Legal   Supervision 

It  has  been  stated  already  in  this  chapter  that  one  of  the 
dangers  of  an  association  is  that  in  the  enthusiasm  to  produce 
results  members  will  sometimes  unconsciously  do  things  which 
legally  are  questionable.     Therefore,  every  association  should 


THE   LAW   AND   THE   ASSOCIATION  3^5 

retain  as  its  counsel  one  of  the  best  lawyers  it  can  find,  some- 
one who  is  thoroughly  familiar  with  antitrust  legislation  and 
all  federal  and  state  laws  under  which  that  particular  associa- 
tion must  operate.  It  is  much  better  to  pay  a  retaining  fee  and 
have  an  association's  activities  supervised  and  kept  within  legal 
limits,  than  it  is  to  take  a  chance  and  possibly  have  to  undergo 
heavy  fines  and  dissolution. 

The  Secretary  Should  Not  be  the  Legal  Adviser 

The  secretary,  even  if  he  is  a  lawyer,  should  not  undertake 
this  work.  He  must  at  all  times  be  on  cordial  and  co-operative 
terms  with  the  members.  If  for  good  and  sufficient  reasons 
some  member  either  wilfully  or  inadvertently  does  something 
which  jeopardizes  not  only  his  interest  but  that  of  the  entire 
association,  the  secretary  cannot  very  well  reprimand  the  mem- 
ber, because  by  so  doing  the  member  may  take  offense  and  in 
taking  offense  refuse  to  report,  or  to  co-operate  with  the 
secretary  at  all,  since  he  may  hold  it  as  a  personal  matter 
between  himself  and  the  secretary.  This  may  seem  a.  far- 
fetched point,  but  it  has  proved  true  in  so  many  instances  as 
to  make  it  a  fact. 

Counsel  Should  be  the  Only  Legal  Supervisor 

The  counsel  for  the  association,  however,  treats  everything 
and  everybody  in  an  impersonal  way,  and  if  one  or  more 
individuals  do  anything  which  is  wrong  he  can  tell  them  so 
in  no  uncertain  terms.  It  is  understood  that  they  have  to  take 
it  from  him  in  good  grace;  and  they  always  do. 

The  counsel,  besides,  is  a  man  who  by  experience  and  daily 
contact  can  keep  in  touch  with  all  new  laws  and  such  matters, 
relative  to  association  activities,  which  it  is  practically  impos- 
sible for  the  secretary  with  his  many  other  duties  to  do.  And 
then,  too,  having  the  counsel  at  hand  gives  the  members  con- 
fidence.   Even  if  he  does  not  have  anything  definite  to  do,  the 


3l6  TRADE   ASSOCIATIONS 

members  feel  that  there  is  someone  watching  out  for  their 
legal  destinies  and  they  are  much  more  willing  to  join  and  to 
co-operate  unhesitatingly.  An  association  should  no  more 
proceed  without  legal  advice  than  would  a  large  corporation. 

Dangerous  Correspondence 

There  is  another  thing  in  relation  to  prices  which  both  the 
counsel  and  the  secretary  must  watch  carefully,  and  that  is  the 
tendency  on  the  part  of  members  to  correspond  with  each  other 
about  subjects  concerning  which,  for  their  own  good  and  that 
of  the  association,  they  should  not  write.  This  very  often  is 
a  difficult  thing  to  supervise;  but  the  members  should  be  con- 
stantly reminded  of  the  risk  of  such  correspondence,  and  have 
the  matter  so  clearly  presented  to  them  by  counsel  that  they 
will  think  twice  before  they  ever  do  anything  or  write  anything 
which  might  for  any  reason  be  questioned.  The  trouble  with 
letters  between  members  is  not  so  much  really  the  effect  of  the 
letters  in  themselves,  but  if  for  some  reason  or  other  the 
association  at  any  time  should  be  under  investigation,  it  is 
an  easy  matter  for  a  district  attorney  to  go  to  the  files  of  a 
member  and  take  out  a  letter  which,  read  by  itself,  might  have 
a  damaging  effect. 

A  recent  interesting  case  which  has  come  before  the  public 
is  that  of  the  Hardwood  Lumber  Manufacturers  Association, 
whose  activities  have  been  placed  under  a  permanent  federal 
injunction.  It  was  not  that  all  of  the  activities  of  the  associa- 
tion were  questioned  by  the  Department  of  Justice,  but  that 
certain  activities  were  illegal — and  the  good  had  to  suffer  with 
the  bad.  It  is  to  be  regretted  that  the  judge,  in  granting  the 
permanent  injunction,  did  not  differentiate  between  the  legal 
and  the  illegal  activities  of  this  association.  The  illegal 
activities  were  the  result  of  an  overzealous  secretary.  In  this 
case  he  was  a  man  who  was  selected  as  a  business  man  from  the 
industry,  and  who  apparently  did  not  know  the  correct  prin- 


THE   LAW   AND   THE   ASSOCIATION  3^7 

ciples  and  practices,  and  the  legal  limits  of  trade  association 
activities.  This  is  only  one  of  many  instances  that  show  how 
essential  it  is  for  a  trade  association  to  have  an  experienced 
secretary  who  knows  his  business  and  a  counsel  who  gives  the 
association  careful  legal  supervision.  In  this  instance  the 
secretary  was  most  indiscreet  in  his  letters  to  the  members, 
advising  them  what  to  do  in  regard  to  their  prices,  and 
getting  the  members  to  write  him  letters  that  showed  how  his 
activities  and  those  of  the  association  had  enabled  them  to 
increase  their  profits  to  a  very  large  extent. 

On  complaint  of  the  Department  of  Justice  against  certain 
practices  the  courts  made  a  statement  which  it  is  hoped  will  act 
as  a  guide-post  to  all  secretaries  and  associations  who  thought- 
lessly or  wilfully  attempt  to  do  what  is  illegal.  The  judge,  in 
presenting  his  opinion,  expressed  himself  as  follows: 

Competition  and  co-operation  by  and  with  those  engaged 
in  the  same  business  is  not  necessarily  inconsistent ;  success- 
ful business  will  likely  result  from  the  combination  of  the 
two,  but  too  much  of  either  may  lead  to  disaster.  Com- 
petition without  co-operation  means  destructive  competition, 
whereas  co-operation  without  competition  means  the  destruc- 
tion of  competition — price-fixing. 

The  Association  a  Clearing  House 

Members  should  never  interchange  statistics  among  them- 
selves, when  there  is  no  one  present  to  supervise  this  work  and 
to  see  that  they  do  not  go  beyond  the  legal  limit.  The  associa- 
tion, while  careful  to  keep  its  own  records  clean,  should  not 
allow  its  members  to  traffic  in  illegalities.  Interchange  of 
reports  among  members  may  prompt  some  to  correspond,  and 
a  member  who  is  ignorant  of  the  law  may  set  down  something 
in  all  innocence  which  might  very  well  be  misinterpreted,  or 
which  might  even  be  unlaw ftd.  Letters  and  telegrams  may 
not  amount  to  anything  themselves,  but  they  always  make  a  great 
deal  of  trouble  and  prolong  investigation  and  possible  litigation. 


3l8  TRADE   ASSOCIATIONS 

When  it  comes  to  the  tendency  of  any  members  to  corre- 
spond among  themselves  or  to  talk  things  over  among  them- 
selves outside  of  association  activities,  it  is  just  as  well  for 
the  counsel  at  all  times  to  see  that  the  fear  of  God  and  of  the 
law  is  in  their  hearts  so  that  they  may  not  consciously  or 
unconsciously  do  anything  which  is  in  the  least  questionable. 

A  man  should  not  act  simply  because  of  legal  compulsion, 
but  he  should  do  the  right  thing  because  he  sees  that  it  is 
economically  best  and  is  therefore  what  he  most  wishes  to 
do.  The  folly  of  agreements  and  curtailing  arrangements 
among  individuals  should  so  appeal  to  him  that  his  innate 
business  sense  will  tell  him  that  they  are  the  things  that  ought 
not  to  be  done.  And  it  may  be  put  down  as  a  rule  that  those 
things  that  ought  not  to  be  done  from  a  legal  standpoint  are 
what  ought  not  to  be  done  from  an  economic  standpoint. 

It  is  the  duty  of  the  secretary  and  the  counsel  constantly 
to  be  teaching  this  to  the  members  and  never  to  let  up  in  their 
vigilance  over  the  activities  not  only  of  the  association  but  of 
the  members  individually  and  collectively.  Just  as  a  man  is 
never  too  old  to  transgress  individually,  so  no  association  is 
so  tried  and  true  but  that  it  needs  careful  watching  to  see  that 
at  all  times  its  activities  are  well  within  legal  limits.  Most 
associations  start  out  with  a  set  of  by-laws,  rules  of  procedure, 
and  intentions  which  are  the  best  possible,  but  as  time  goes 
on  their  activities  increase  and  they  keep  letting  out  a  little 
more  and  a  little  more  until  finally  they  are  over  the  danger 
line  or  to  the  legal  limit.  It  is  then  that  the-  counsel  ought  to 
make  them  get  back  and  stay  well  behind  the  line  rather  than 
go  over  it  and  get  into  dangerous  territory. 

Conclusion 

After  reading  these  last  two  chapters  about  the  legal 
aspects  of  trade  association  activities  one  might  feel  like  Mrs. 
Partington's  Willie,  who  said  he  had  read  so  many  "don'ts" 


THE   LAW   AND   THE   ASSOCIATION  319 

that  all  he  could  do  was  just  sit  and  do  nothing.  It  is  not 
so  bad  as  all  that.  The  legal  question  has  been  gone  into 
thoroughly  here  so  that  there  may  be  no  misunderstanding.  If 
an  association  has  an  able  counsel  and  the  right  kind  of  a 
secretary  the  members  do  not  have  to  concern  themselves  about 
getting  into  trouble ;  they  need  not  worry  about  any  of  these 
legal  interpretations  or  court  decisions;  they  will  be  steered 
straight  and  need  not  feel  that  they  are  engaging  in  any  prac- 
tices within  the  activities  of  their  association  which  in  the 
remotest  way  are  related  to  anything  questionable.  The  very 
existence  of,  and  membership  in  a  trade  association  give  the 
individual  protection  against  imputation;  this  is  the  safe  and 
sane  way  for  him. 

The  existence  of  trade  associations  in  almost  every  branch 
of  industry  is  the  strongest  possible  evidence  of  the  necessity 
for  such  organization.  Our  leading  statesmen  and  public 
officials,  some  senators  and  representatives,  and  some  members 
of  the  Federal  Trade  Commission,  have  publicly  advocated  the 
necessity  for  trade  associations.  There  is  no  legislation, 
either  federal  or  state,  that  denounces  trade  associations.  The 
term  "trade  association"  is  to  be  understood  as  meaning  "an 
association  for  lawful  purposes."  The  average  man  knows 
what  is  right  and  what  is  wrong,  and  if  when  contemplating 
any  proposed  action  he  will  put  to  his  conscience  the  inquiry, 
"Is  this  right?"  he  will  have  little  chance  for  error  in  the  reply 
that  is  given.  When  men  have  violated  the  law  they  usually 
knew  that  they  were  doing  so,  and  when  they  say  that  they 
did  not  they  are  trying  to  fool  themselves.  And  so,  as  an 
economic  and  legal  necessity,  these  many  trade  associations 
have  come  into  existence,  increasing  and  developing  year  by 
year,  and  have  become  a  growing  influence  in  our  industrial 
and  national  progress  toward  fairer  and  more  honest  products, 
and  toward  service  and  justice  for  all. 


APPENDIX  A 

BIBLIOGRAPHY 

This  bibliography  is  not  a  complete  list  of  all  books  on 
this  subject,  nor  of  what  may  be  the  best  books,  but  merely 
a  list  of  the  books  read  and  studied  by  the  author  in  prepara- 
tion of  this  work.  The  author's  personal  comments  are  given 
only  as  brief  suggestions  to  anyone  wishing  to  consult  these 
books. 

General 

Ashley,  W.  J.  Surveys,  Historic  and  Economic.  London,  Longmans, 
Green  &  Co.,  1900.    476  pp. 

A  detailed  presentation  of  the  relation  between  economic  and 
historical  evolution.  Somewhat  erudite,  yet  interesting,  with  a 
splendid  background. 

Bowley,  A.  L.  Elementary  Manual  of  Statistics.  London,  Macdonald 
&  Evans.  1915.    220  pp. 

Excellent  as  an  aid  to  satisfactory  statistical  work. 

Brand,  E.  A.  Commercial  Organizations.  Washington,  Government 
Printing  Office,  1912.  48  pp.  (Department  of  Commerce.  Spe- 
cial Agents  Series,  No.  60.) 

Brandeis,  Louis.  Business — a  Profession.  Boston,  Small,  Maynard 
and  Co.,  1914.     327  pp. 

A  monograph  on  conducting  business  on  the  basis  of  social 
justice.  An  interesting  opinion,  in  some  respects  more  idealistic 
than  practical,  yet  sound. 

Brentano,  Lujo.  On  the  Development  of  Guilds  and  Origin  of  Trade- 
Unions.     London,  Paul  (Kegan),  Trench,  Triibner  &  Co.,  1870. 

135  PP- 

A  somewhat  old-fashioned  but  reliable  historical  study  of  trade 
development. 
Brinton,  W.  C.    Graphic  Methods  for  Presenting  Facts.     New  York, 
Engineering  Magazine  Co.,  1914.     371  pp. 

321 


322  APPENDIX 

Clark,  J.  B.  and  J.  M.     The  Control  of  Trusts.     Rewritten  and  en- 
larged.   New  York,  Macmillan  Co.,  1912.    202  pp. 

In  place  of  either  destruction  of  trusts  or  acceptance  of  monop- 
oly proposes  regulation  of  competition  through  transportation 
control,  abolition  of  holding  companies,  prevention  of  predatory 
competition,  and  breaking  up  of  large  monopolies. 

Collier,  W.  M.    The  Trusts.     New  York,  Baker  &  Taylor  Co.,  1900. 

338  pp. 

A  discussion  with  general  suggestions,  showing  advantages  and 
disadvantages  of  trusts.     Worth  only  rapid  reading. 
Crowell,  J.   F.     Trusts  and  Competition.     Chicago,  A.  C.  McClurg 
&  Co.,  1915.     191  pp. 

Sets  forth  in  clear  relief  the  main  aspects  of  the  issue  in  "big 
business."    Does  not  exploit  any  special  theory  but  analyzes  facts 
and  conditions  by  the  light  of  economic  experience. 
Dealey,  J.  Q.     Sociology,  Its   Simpler  Teachings  and  Applications. 
Boston,  Silver,  Burdette  &  Co.,  1909.    405  pp. 
Clever  treatment  of  elementary  principles. 
Duncan,  C.  S.    Industrial  Research.    New  York,  Macmillan  Co.,  1919. 

385  PP- 

A  general  treatment  of  industry  so  far  as  trade  associations 

are  concerned.     A  readable  book,  and  gives  an  appreciation  of 

the  vital  problems  involved. 
Durand,  E.  D.    The  Trust  Problem.    Cambridge,  Harvard  University 

Press,  1915.     145  PP- 

A  thorough  analysis  and  detailed  discussion.     Not  to  be  read 

as  an  introduction  to,  but  rather  as  an  advanced  study  of  the 

subject. 
Eberstadt,  Rudolph.    Der  Ursprung  des  Zunftwesens  und  die  alteren 

Handwerkerverbande  des  Mittelalters.    Leipzig,  Duncker  &  Hum- 
blot,  1900.    202  pp. 

Not  translated  into  English.    A  good  study  for  one  who  desires 

heavy  German  language,  thought,  and  detail. 
Eckert,  Heinrich.     Die  Kramer  und  Kramerkunst  in  Siiddeutschen 

Stadten  bis  zum  Ausgang  des  Mittelalters.    Berlin,  W.  Rothschild, 

1909.    28  pp. 

Not  translated  into   English.     A  study  of  the  guilds  of  the 

middle  ages  and  their  modern  manifestations. 
Eddy,  A.  J.    The  New  Competition.    Chicago,  A.  C.  McClurg  &  Co., 

1915.    423  pp. 


BIBLIOGRAPHY  3^3 

An  excellent  book,  setting  forth  all  arguments  for  open  com- 
petition and  co-operation  through  associations. 
Ely,  R.  T.     Fundamental  Principles  of  Co-operation.     Minneapolis, 
Right  Relationship  League,  1909.    6  pp. 

Monopolies  and  Trusts.     New  edition.     New  York,  Macmillan 
Co.,  1912.    273  pp. 

An  advanced  discussion  with  emphasis  on  social  and  economic 
evolution.    A  book  to  study,  not  to  read  as  a  pastime. 
Fernley,  T.  A.    Price  Maintenance.    2nd  edition.    Philadelphia,  Com- 
merce Publishing  Co.,  1913.    311  pp. 

A  somewhat  superficial  yet  practical  discussion  of  elementary 
economic  principles  of  price. 
Franklin,  A.  L.  A.     Les  Corporations  Ouvrieres  de  Paris  du  XII*' — 
XVIIIe  siecles.     Paris,  F.  Didot  &  Cie,  1884.     13  Vols. 

Not   translated    into    English.     A    remarkable   record   of   the 
development   of   the   different  trades.     Written   in   an   attractive 
manner,  thoroughly  scholarly  and  interesting. 
Giddings,  F.  H.    Elements  of  Sociology.    New  York,  Macmillan  Co., 

1898.    353  PP- 
An  elementary  treatment — a  desirable  introduction. 

Hart,  T.  C.  The  Employer's  Association — What  It  Is  and  What  It 
Does.  The  Bookkeeper  and  Business  Man's  Magazine,  Vol.  21, 
pp.  10-24,  Detroit,  July,  1908. 

Hilbert,  F.  W.  Employers'  Associations  in  the  United  States.  Hol- 
lander, J.  H.,  and  Barnett,  G.  E.  Studies  in  American  Trade 
Unionism,  pp.  183-217.  New  York,  Henry  Holt  &  Co., 
1906. 

Hirst,  F.  W.  Monopolies,  Trusts  and  Kartells.  London,  Methuen  & 
Co.,  1905.     188  pp. 

Should  be  read  by  one  who  desires  to  be  thoroughly  informed 
on  the  subject.  Not  a  book  for  pastime  reading  but  splendid  for 
study. 

Hurley,  E.  N.  Awakening  of  Business.  Garden  City,  N.  Y.,  Double- 
day,  Page  &  Co.,  19 16.    240  pp. 

A  book  of  vision  by  a  man  of  marked  ability  and  wide  grasp 
of  business  fundamentals. 

Jenks,  J.  W.  The  Trust  Problem.  4th  edition,  revised.  Garden  City, 
N.  Y.,  Doubleday,  Page  &  Co.,  191 7.    499  pp. 

An  authoritative  book  written  in  a  clear,  convincing  style, 
thoroughly  reliable  and  up  to  date. 


324  APPENDIX 

King,  W.  I.    Elements  of  Statistical  Method.    New  York,  Macmillan 

Co.,  1912.    250  pp. 

See  note  on  Bowley's  work. 
Kramer,  Stella.     English  Craft  Guilds  and  the  Government.     New 

York,    Macmillan    Co.,    1905.      152   pp.      (Columbia    University 

Studies  in  History,  Economics  and  Public  Law.) 
A  careful  study  and  analysis  of  the  rise  of  the  craft  guilds 

and  the  reasons  or  theory  behind  their  eventual  decay.    Valuable 

as  collateral  reading. 
Lambert,    J.    M.      Two    Thousand    Years    of    Gild    Life.      London, 

Simkin,  Marshall,  Hamilton,  Kent  &  Co.,  1891.    414  pp. 
An  interesting  history   of  trade,   especially   of   early  English 

guild  life.     Instructive  and  recreative  reading. 
Levy,   Hermann.     Monopoly   and   Competition.     London,   Macmillan 

Co.,  191 1.    352  pp. 
A  study  of  English  industrial  organization.     Of  chief  interest 

as  a  historical  development  of  old  industrial  systems. 
Marcosson,  L  F.     Labor  Met  by  Its  Own  Methods.     World's  Work, 

Vol.  7,  pp.  4309-4314,  New  York,  Jan.  1904. 
Marshall,  A.  C.    Benefits  of  Employers'  Associations.    National  Metal 

Trades    Association.      Bulletin,    Vol.    2,    pp.    871-878,    Chicago, 

1903. 
Martin-Saint  Leon,  fitienne.     Historic  des  Corporations  de  Metiers 

depuis  leurs  Origines  jusqu'a  leur  Suppression  en  1791.     Paris, 

Guillaumin  &  Cie,  1897.     671  pp. 

Not  translated  into  English.     Rather  heavy  and  need  be  read 

only  in  advanced  study. 
Mead,  E.  S.     Trust  Finance;  a  Study  of  the  Genesis,  Organizations, 

and   Management   of   Industrial    Combinations.      New   York,    D. 

Appleton  &  Co.,  1903.    387  pp. 

Valuable  in  this  relation  only  as  it  shows  the  financial  effects 

of  combinations  on  economic  development. 
Milnes,  Alfred.     From  Gild  to  Factory.     London,  Finch  &  Co.,  1904. 

84  pp. 

A  brief  and   worth-while  economic  treatise.     A  good  intro- 
duction to  the  subject. 
Moody,  John.     Truth  About  the  Trusts.     New  York,  Moody  Maga- 
zine and  Book  Co.,  1904.    514  pp. 

A  general  presentation,  not  very  deep ;  an  analysis  and  descrip- 
tion written  for  popular  consumption. 


BIBLIOGRAPHY  325 

Poock,  Ansclni.     Trade  Societies  in  the  Middle  Ages.     Manchester, 
England,   Statistical   Society.     Transactions,   1905-6,  pp.  89-128. 
Ripley,   W.   Z.     Trusts,   Pools   and   Corporations.      Revised   edition. 
Boston,  Ginn  &  Co.,  1916.     872  pp. 

A  scholarly  work  based  on  the  application  of  the  case  system 
of  law  schools  to  a  study  of  economics,  and  for  that  reason  very 
real  and  practical. 
Robinson,  M.  F.     The  Spirit  of  Association.     London,  John  Murray, 
1913.    416  pp. 

An  account  of  guilds,  general  co-operative  movements,  and  the 
development  of  trade  unionism  in  Great  Britain. 
Seligman,  E.  R.  Two  Chapters  on  the  Medieval  Guilds  of  England. 
American  Economic  Association.  Publications,  Vol.  2,  No.  5, 
pp.  386-493,  Ithaca,  N.  Y.,  Nov.,  1887. 
Smith,  E.  J.  New  Trades  Combination  Movement.  London,  Riving- 
tons,  1899.     120  pp. 

An  English  evidence  of  co-operative  effort,  both  in  capital  and 
labor.     Sets  forth  principles,  methods,  and  progress. 
Some    Recent    Criticisms    on    the    New"  Trade    Combination    Move- 
ment.    Economic  Review,  Vol.  10,  pp.  145-163,  London,  1900. 

Excellent,  although  conclusions  are  not  altogether  fair.     Gives 
a  point  of  view  to  be  considered. 
Spencer,  Herbert.     Principles  of  Sociology.    New  York,  D.  Appleton 

&  Co.    3  Vols. 
Staley,  Edgcumbe.     Guilds  of  Florence.     London,  Methuen  &  Co., 
1906.    686  pp. 

A  careful   treatment   full   of  personalities,  written  by   a  man 
with  a  vast  background  of  knowledge  of  early  Italian  cities  and 
their  people.     A  charming  and  valuable  book. 
Taft,  W.  H.     The  Anti-Trust  Act  and  the   Supreme  Court.     New 
York,  Harper  &  Brothers,  1914.     132  pp. 

Everyone   interested    in   trade   associations,   big  business,    and 
economics    should    read    this.      Vital,    authoritative,    and    fas- 
cinating. 
Trusts  and  Industrial   Combinations.     U.   S.  Department  of  Labor. 

Bulletin  No.  29,  Vol.  5,  pp.  661-831.    Washington,  July,  1900. 
United  States.     Justice  Department.     Federal  Anti-Trust  Decisions, 
Cases  Decided  in  the  U.  S.  Courts,  1890-1917;  compiled  by  John 
L.   Lott  and   Roger   Shale.     Washington,   Government   Printing 
Office,  1912-1918.    5  Vols. 


326  APPENDIX 

Unwin,  George.    Gilds  and  Companies  of  London.    London,  Methuen 

&  Co.,  1908.    416  pp. 

An  interesting  historical  presentation.     This  should  be   read 

with  the  book  by  Staley  for  a  desirable  comparison  between  the 

English  and  Italian  development. 
Van  Hise,  C.  R.    Concentration  and  Control.    Revised  edition.    New 

York,  Macmillan  Co.,  1914.    298  pp. 

Aims  to  present  an  outline  picture  of  industry  in  the  United 

States  and  suggests  a  way  to  gain  its  economic  advantages,  yet  at 

the  same  time  to  guard  the  interests  of  the  public.     A  sane, 

thoughtful  work,  though  by  nature  somewhat  ephemeral. 
Willoughby,  W.  F.    Employers'  Associations  for  Dealing  with  Labor 

in  the  United  States.     Quarterly  Journal  of  Economics,  Vol.  20, 

pp.  1 10-150,  Boston,  Nov.,  1905. 
Zimmern,  Helen.     The  Hansa  Towns.     New  York,  G.  P.  Putnam's 

Sons,  1889.    389  pp.     (Story  of  the  Nations  Series). 
A  history  of  the  Hanseatic  League.     Good  to  give  an  idea  of 

the  general  historical  facts  behind  trade  and  guild  growth. 


APPENDIX  B 

LEGAL  CASES  AFFECTING  TRADE  ASSOCIATIONS 

These  are  the  more  important  cases  with   which   every 
secretary  of  a  trade  association  should  be  familiar. 

The  Standard  Oil  Company  of  New  Jersey  et  al.  v. 
United  States,  221  U.  S.  i. 

Appeal  from  the  Circuit  Court  of  the  United  States  for  the 

Eastern  District  of  Missouri 
Argued    March    14,    15,    16,    1910;    restored    to   docket    for 
reargument  April  11,  1910;  reargued  January  12,  13,  16,  17, 

1911.    Decided  May  15,  1911. 

The  Anti-Trust  Act  of  July  2,  1890,  c.  647,  26  Stat.  209,  should 
be  construed  in  the  light  of  reason;  and,  as  so  construed,  it  prohibits 
all  contracts  and  combinations  which  amount  to  an  unreasonable  or 
undue  restraint  of  trade  in  interstate  commerce. 

The  combination  of  the  defendants  in  this  case  is  an  unreasonable 
and  undue  restraint  of  trade  in  petroleum  and  its  products  moving 
in  interstate  commerce,  and  falls  within  the  prohibitions  of  the  act 
as  so  construed. 

Where  one  of  the  defendants  in  a  suit,  brought  by  the  govern- 
ment in  a  circuit  court  of  the  United  States  under  the  authority  of 
Section  4  of  the  Anti-Trust  Act  of  July  2,  1890,  is  within  the  district, 
the  court,  under  the  authority  of  section  5  of  that  act,  can  take  juris- 
diction and  order  notice  to  be  served  upon  the  non-resident  defend- 
ants. 

Allegations  as  to  facts  occurring  prior  to  the  passage  of  the  Anti- 
Trust  Act  may  be  considered  solely  to  throw  light  on  acts  done  after 
the  passage  of  the  act. 

The  debates  in  Congress  on  the  Anti-Trust  Act  of  1890  show  that 
one  of  the  influences  leading  to  the  enactment  of  the  statute  was  doubt 
as  to  whether  there  is  a  common  law  of  the  United  States  governing 
the  making  of  contracts  in  restraint  of  trade  and  the  creation  and 
maintenance  of  monopolies  in  the  absence  of  legislation. 

S327 


328  APPENDIX 

While  debates  of  the  body  enacting  it  may  not  be  used  as  means 
for  interpreting  a  statute,  they  may  be  resorted  to  as  a  means  of 
ascertaining  the  conditions  under  which  it  was  enacted. 

The  terms  "restraint  of  trade"  and  "attempts  to  monopolize,"  as 
used  in  the  Anti-Trust  Act,  took  their  origin  in  the  common  law  and 
were  familiar  in  the  law  of  this  country  prior  to  and  at  the  time  of 
the  adoption  of  the  act,  and  their  meaning  should  be  sought  from  the 
conceptions  of  both  English  and  American  law  prior  to  the  passage 
of  the  act. 

The  original  doctrine  that  all  contracts  in  restraint  of  trade  were 
illegal  was  long  since  so  modified  in  the  interest  of  freedom  of 
individuals  to  contract  that  the  contract  was  valid  if  the  resulting 
restraint  was  only  partial  in  its  operation  and  was  otherwise  reason- 
able. 

The  early  struggle  in  England  against  the  power  to  create  monopo- 
lies resulted  in  establishing  that  those  institutions  were  incompatible 
with  the  English  Constitution. 

At  common  law  monopolies  were  unlawful  because  of  their  re- 
striction upon  individual  freedom  of  contract  and  their  injury  to  the 
public  and  at  common  law;  and  contracts  creating  the  same  evils 
were  brought  within  the  prohibition  as  impeding  the  due  course  of, 
or  being  in  restraint  of,  trade. 

At  the  time  of  the  passage  of  the  Anti-Trust  Act  the  English 
rule  was  that  the  individual  was  free  to  contract  and  to  abstain  from 
contracting  and  to  exercise  every  reasonable  right  in  regard  thereto, 
except  only  as  he  was  restricted  from  voluntarily  and  unreasonably 
or  for  wrongful  purposes,  restraining  his  right  to  carry  on  his  trade. 
Mogul  Steamship  Co.  v.  McGregor,  1892,  A.  C.  25. 

A  decision  of  the  House  of  Lords,  although  announced  after  an 
event,  may  serve  reflexly  to  show  the  state  of  the  law  in  England  at 
the  time  of  such  event. 

This  country  has  followed  the  line  of  development  of  the  law  of 
England,  and  the  public  policy  has  been  to  prohibit,  or  treat  as 
illegal,  contracts,  or  acts  entered  into  with  intent  to  wrong  the  public 
and  which  unreasonably  restrict  competitive  conditions,  limit  the  right 
of  individuals,  restrain  the  free  flow  of  commerce,  or  bring  about 
public  evils  such  as  the  enhancement  of  prices. 

The  Anti-Trust  Act  of  1890  was  enacted  in  the  light  of  the  then 
existing  practical  conception  of  the  law  against  restraint  of  trade, 
and  the  intent  of  Congress  was  not  to  restrain  the  right  to  make 


LEGAL    CASES   AFFECTING  ASSOCIATIONS  3^9 

and  enforce  contracts,  whether  resulting  from  combinations  or  other- 
wise, which  do  not  unduly  restrain  interstate  or  foreign  commerce, 
but  to  protect  that  commerce  from  contracts  or  combinations  by 
methods,  whether  old  or  new,  which  would  constitute  an  interference 
with,  or  an  undue  restraint  upon  it. 

The  Anti-Trust  Act  contemplated  and  required  a  standard  of 
interpretation,  and  it  was  intended  that  the  standard  of  reason  which 
had  been  applied  at  the  common  law  should  be  applied  in  determin- 
ing whether  particular  acts  were  within  its  prohibitions. 

The  word  "person"  in  Section  2  of  the  Anti-Trust  Act,  as  con- 
strued by  reference  to  Section  8  thereof,  implies  a  corporation  as  well 
as  an  individual. 

The  commerce  referred  to  by  the  words  "any  part"  in  Section  2 
of  the  Anti-Trust  Act,  as  construed  in  the  light  of  the  manifest 
purpose  of  that  act,  includes  geographically  any  part  of  the  United 
States  and  also  any  of  the  classes  of  things  forming  a  part  of  inter- 
state or  foreign  commerce. 

The  words  "to  monopolize"  and  "monopolize"  as  used  in  Section  2 
of  the  Anti-Trust  Act  reach  every  act  bringing  about  the  prohibited 
result. 

Freedom  to  contract  is  the  essence  of  freedom  from  undue  re- 
straint on  the  right  to  contract. 

In  prior  cases,  where  general  language  has  been  used  to  the 
effect  that  reason  could  not  be  resorted  to  in  determining  whether  a 
particular  case  was  within  the  prohibitions  of  the  Anti-Trust  Act, 
the  unreasonableness  of  the  acts  under  consideration  was  pointed  out 
and  those  cases  are  only  authoritative  by  the  certitude  that  the  rule 
of  reason  was  applied;  United  States  v.  Trans-Missouri  Freight 
Association,  i66  U.  S.  290,  and  United  States  v.  Joint  Traffic  Asso- 
ciation, 171  U.  S.  505,  limited  and  qualified  so  far  as  they  conflict 
with  the  construction  now  given  to  the  Anti-Trust  Act  of  1890. 

The  application  of  the  Anti-Trust  Act  to  combinations  involving 
the  production  of  commodities  within  the  state  does  not  so  extend 
the  power  of  Congress  to  subjects  dehors  its  authority  as  to  render 
the  statute  unconstitutional.  United  States  v.  E.  C.  Knight  Co.,  156 
U.  S.  I,  distinguished. 

The  Anti-Trust  Act  generically  enumerates  the  character  of  the 
acts  prohibited  and  the  wrongs  which  it  intends  to  prevent  and  is 
susceptible  of  being  enforced  without  any  judicial  exertion  of  legis- 
lative power. 


330  APPENDIX       . 

The  unification  of  power  and  control  over  a  commodity  such  as 
petroleum  and  its  products,  by  combining  in  one  corporation  the  stocks 
of  many  other  corporations  aggregating  a  vast  capital,  gives  rise,  of 
itself,  to  the  prima  facie  presumption  of  an  intent  and  purpose  to 
dominate  the  industry  connected  with,  and  gain  perpetual  control  of 
the  movement  of,  that  commodity  and  its  products  in  the  channels 
of  interstate  commerce  in  violation  of  the  Anti-Trust  Act  of  1890,  and 
that  presumption  is  made  conclusive  by  proof  of  specific  acts  such 
as  those  in  the  record  of  this  case. 

The  fact  that  a  combination  over  the  products  of  a  commodity 
such  as  petroleum  does  not  include  the  crude  article  itself  does  not 
take  the  combination  outside  of  the  Anti-Trust  Act  when  it  appears 
that  the  monopolization  of  the  manufactured  products  necessarily 
controls  the  crude  article. 

Penalties  which  are  not  authorized  by  the  law  cannot  be  inflicted 
by  judicial  authority. 

The  remedy  to  be  administered  in  case  of  a  combination  violating 
the  Anti-Trust  Act  is  twofold:  first,  to  forbid  the  continuance  of 
the  prohibited  act,  and  second,  to  so  dissolve  the  combination  as  to 
neutralize  the  force  of  the  unlawful  power. 

The  constituents  of  an  unlawful  combination  under  the  Anti-Trust 
Act  should  not  be  deprived  of  power  to  make  normal  and  lawful 
contracts,  but  should  be  restrained  from  continuing  or  recreating  the 
unlawful  combination  by  any  means  whatever;  and  a  dissolution  of 
the  offending  combination  should  not  deprive  the  constituents  of  the 
right  to  live  under  the  law,  but  should  compel  them  to  obey  it. 

In  determining  the  remedy  against  an  unlawful  combination,  the 
court  must  consider  the  result  and  not  inflict  serious  injury  on  the 
public  by  causing  a  cessation  of  interstate  commerce  in  a  necessary 
commodity. 

173  Fed.  Rep.  177,  modified  and  affirmed. 


Grenada    Lumber    Company    v.    State    of    Mississippi, 

217  U.  S.  433. 

Error  to   the   Supreme   Court  of  the   State  of  Mississippi. 
No.  493.  Submitted  January  10,  1910.    Decided  May  2,  1910. 

This  court  accepts  the  construction  of  the  state  court;  and  where 
that  court  has  held  that  an  agreement  between  retailers  not  to  pur- 


LEGAL   CASES    AFFECTING    ASSOCIATIONS  33 1 

chase  from  wholesale  dealers  who  sell  direct  to  consumers  within 
prescribed  localities  amounts  to  a  restraint  of  trade  within  the  mean- 
ing of  the  antitrust  statute  of  the  state,  the  only  question  for  this 
court  is  whether  such  statute  so  unreasonably  abridges  freedom  of 
contract  as  to  amount  to  deprivation  of  property  without  due  process 
of  law  within  the  meaning  of  the  Fourteenth  Amendment. 

An  act  harmless  when  done  by  one  may  become  a  public  wrong 
when  done  by  many  acting  in  concert,  and  when  it  becomes  the 
object  of  a  conspiracy  and  operates  in  restraint  of  trade  the  police 
power  of  the  state  may  prohibit  it  without  impairing  the  liberty  of 
contract  protected  by  the  Fourteenth  Amendment,  and  so  held  that 
while  an  individual  may  not  be  interfered  with  in  regard  to  a  fixed 
trade  rule  not  to  purchase  from  competitors,  a  state  may  prohibit 
more  than  one  from  entering  into  an  agreement  not  to  purchase  from 
certain  described  persons  even  though  such  persons  be  competitors 
and  the  agreement  be  made  to  enable  the  parties  thereto  to  continue 
their  business  as  independents. 

Whether  a  combination  is  or  is  not  illegal  at  common  law  is 
immaterial  if  it  is  illegal  under  a  state  statute  which  does  not  infringe 
the  Fourteenth  Amendment. 

A  combination  that  is  actually  in  restraint  of  trade  under  a  statute 
which  is  constitutional,  is  illegal  whatever  may  be  the  motive  or 
necessity  inducing  it. 

In  determining  the  validity  of  a  state  statute,  this  court  is  con- 
cerned only  with  its  constitutionality ;  it  does  not  consider  any  question 
of  its  expediency. 

In  determining  the  constitutionality  of  a  state  statute  this  court 
considers  only  so  much  thereof  as  is  assailed,  construed  and  applied  in 
the  particular  case. 

One  not  within  a  class  affected  by  a  statute  cannot  attack  its  con- 
stitutionality. 

Where  the  penalty  provisions  of  a  statute  are  clearly  separable, 
as  in  this  case,  and  are  not  invoked,  this  court  is  not  called  upon  to 
determine  whether  the  penalties  are  so  excessive  as  to  amount  to 
deprivation  of  property  without  due  process  of  law  and  thus  render 
the  statute  unconstitutional  in  that  respect. 

In  this  case,  in  an  action  by  the  state  in  equity  and  not  to  enforce 
penalties,  held  that  the  antitrust  statute  of  Mississippi,  Section  5002, 
Code,  is  not  unconstitutional  as  abridging  the  liberty  of  contract  as 
against   retail   lumber  dealers   uniting  in   an   agreement,   which  the 


332  APPENDIX 

state  court  decided  was  within  the  prohibition  of  the  statute,  not  to 
purchase  any  materials  from  wholesale  dealers  selling  direct  to  con- 
sumers in  certain  localities. 


United  States  of  America  v,  American  Tobacco  Company 
American  Tobacco  Company  v.  United  States  of  America 

221  U.  S.  io6. 

Appeals  from  the  Circuit  Court  of  the  United  States  for  the 

Southern   District  of  New  York. 

Nos.  Ii8,  119.  Argued  January  3,  4,  5,  6,  1910;  restored  to 

docket  for  reargument  April  11,  1910;  reargued  January  9, 

10,  II,  12,  1911.    Decided  May  29,  1911. 

Standard  Oil  Co.  v.  United  States,  ante,  p.  i,  followed  and  re- 
affirmed as  to  the  construction  to  be  given  to  the  Anti-Trust  Act 
of  July  2,  1890,  c.  647,  26  Stat.  209;  and  held  that  the  combination 
in  this  case  is  one  in  restraint  of  trade  and  an  attempt  to  monopolize 
the  business  of  tobacco  in  interstate  commerce  within  the  prohibition 
of  the  act. 

In  order  to  meet  such  a  situation  as  is  presented  by  the  record  in 
this  case  and  to  afford  the  relief  for  the  evils  to  be  overcome,  the 
Anti-Trust  Act  of  1890  must  be  given  a  more  comprehensive  appli- 
cation than  affixed  to  it  in  any  previous  decision. 

In  Standard  Oil  Co.  v.  United  States,  ante,  p.  i,  the  words  "re- 
straint of  trade"  as  used  in  Section  i  of  the  Anti-Trust  Act  were 
properly  construed  by  the  resort  to  reason ;  the  doctrine  stated  in 
that  case  was  in  accord  with  all  previous  decisions  of  this  court, 
despite  the  contrary  view  at  times  erroneously  attributed  to  the 
expressions  in  United  States  v.  Trans-Missouri  Freight  Association, 
166  U.  S.  290,  and  United  States  v.  Joint  Traffic  Association,  171 
U.  S.  505. 

The  Anti-Trust  Act  must  have  a  reasonable  construction  as  there 
can  scarcely  be  any  agreement  or  contract  among  business  men  that 
does  not  directly  or  indirectly  affect  and  possibly  restrain  commerce. 
United  States  v.  Joint  Traffic  Association,  171  U.  S.  505,  568. 

The  words  "restraint  of  trade"  at  common  law,  and  in  the  law  of 
this  country  at  the  time  of  the  adoption  of  the  Anti-Trust  Act,  only 
embraced  acts,  contracts,  agreements,  or  combinations  which  operated 
to  the  prejudice  of  the  public  interests  by  unduly  restricting  com- 


LEGAL   CASES   AFFECTING   ASSOCIATIONS  333 

petition  or  by  unduly  obstructing  due  course  of  trade,  and  Congress 
intended  that  those  words  as  used  in  that  act  should  have  a  like  sig- 
nificance; and  the  ruling  in  Standard  Oil  Co.  v.  United  States,  ante, 
p.  I,  to  this  effect  is  re-expressed  and  reaffirmed. 

The  public  policy  manifested  by  the  Anti-Trust  Act  is  expressed 
in  such  general  language  that  it  embraces  every  conceivable  act  which 
can  possibly  come  within  the  spirit  of  its  prohibitions,  and  that  policy 
cannot  be  frustrated  by  resort  to  disguise  or  subterfuge  of  any  kind. 
The  record  in  this  case  discloses  a  combination  on  the  part  of  the 
defendants  with  the  purpose  of  acquiring  dominion  and  control  of 
interstate  commerce  in  tobacco  by  methods  and  manners  clearly  within 
the  prohibition  of  the  Anti-Trust  Act:  and  the  subject  matters  of  the 
combination  and  the  combination  itself  are  not  excluded  from  the  scope 
of  the  act  as  being  matters  of  intrastate  commerce  and  subject  to 
state  control. 

In  this  case  the  combination  in  all  its  aspects  both  as  to  stock 
ownership,  and  as  to  the  corporations  independently,  including  foreign 
corporations  to  the  extent  that  they  became  co-operators  in  the  com- 
bination, come  within  the  prohibition  of  the  first  and  second  sections 
of  the  Anti-Trust  Act. 

In  giving  relief  against  an  unlawful  combination  under  the  Anti- 
Trust  Act  the  court  should  give  complete  and  efficacious  effect  to  the 
prohibitions  of  the  statute;  accomplish  this  result  with  as  little  injury 
as  possible  to  the  interest  of  the  general  public ;  and  have  a  proper 
regard  for  the  vested  property  interests  innocently  acquired. 

In  this  case  the  combination  in  and  of  itself,  and  also  all  of  its 
constituent  elements,  are  decreed  to  be  illegal,  and  the  court  below 
is  directed  to  hear  the  parties  and  ascertain  and  determine  a  plan 
or  method  of  dissolution  and  of  recreating  a  condition  in  harmony 
with  law,  to  be  carried  out  within  a  reasonable  period  (in  this  case 
not  to  exceed  eight  months),  and,  if  necessary,  to  effectuate  this  result 
either  by  injunction  or  receivership. 

Pending  the  achievement  of  the  result  decreed  all  parties  to  the 
combination  in  this  case  should  be  restrained  and  enjoined  from  en- 
larging the  power  of  the  continuation  by  any  means  or  device  what- 
ever. 

Where  a  case  is  remanded,  as  this  one  is,  to  the  lower  court  with 
directions  to  grant  the  relief  in  a  different  manner  from  that  decreed 
by  it,  the  proper  course  is  not  to  modify  and  affirm,  but  to  reverse  and 
remand,  with  directions  to   enter  a  decree   in  conformitv   with   the 


334  APPENDIX 

opinion  and  to  carry  out  the  directions  of  this  court  with  costs  to 
defendants. 

164  Fed.  Rep.  700,  reversed  and  remanded  with  directions. 


Eastern  States  Retail  Lumber  Dealers  Association  v. 

United  States 
McBride,  individually  and  as  President  of  the  Retail 
Lumbermen's  Association   of   Philadelphia  v.   United 

States 

234  U.  S.  600. 

Appeals  from  the  District  Court  of  the  United  States  for  the 

Southern   District   of   New   York. 

Nos.    511,    550.      Argued    October    24,    27,    1913.      Decided 

June  22,  1914. 

Conspiracies  are  seldom  capable  of  proof  by  direct  testimony  and 
a  conspiracy  to  accomplish  that  which  is  their  natural  consequence 
may  be  inferred  from  the  things  actually  done. 

The  Sherman  Law,  as  construed  by  this  court  in  the  Standard 
Oil  Case,  while  not  reaching  normal  and  usual  contracts  incident  to 
lawful  purposes  and  in  furtherance  of  legitimate  trade,  does  broadly 
condemn  all  combinations  and  conspiracies  which  restrain  the  free 
and  natural  flow  of  trade  in  the  channels  of  interstate  commerce. 

Held  in  this  case  that  the  circulation  of  a  so-called  official  report 
among  members  of  an  association  of  retail  dealers  calling  attention 
to  actions  of  listed  wholesale  dealers  in  selling  direct  to  consumers, 
tended  to  prevent  members  of  the  association  from  dealing  with  the 
listed  dealers  referred  to  in  the  report,  and  to  directly  and  unreason- 
ably restrain  trade  by  preventing  it  with  such  listed  dealers,  and  was 
within  the  prohibitions  of  the  Sherman  Law. 

While  a  retail  dealer  may  unquestionably  stop  dealing  with  a 
wholesaler  for  any  reason  sufficient  to  himself,  he  and  other  dealers 
may  not  combine  and  agree  that  none  of  them  will  deal  with  such 
wholesaler  without,  in  case  interstate  commerce  is  involved,  violating 
the  Sherman  Law. 

An  act,  harmless  when  done  by  one  person,  may  become  a  public 
wrong  when  done  by  many  acting  in  concert  in  pursuance  of  a  con- 
spiracy.    Grenada  Lumber  Co.  v.  Mississippi,  217  U.  S.  433. 

201  Fed.  Rep.  581,  affirmed. 


LEGAL    CASES   AFFECTING    ASSOCIATIONS  335 

Nash  v.  United  States,  229  U.  S.  373. 

Certiorari   to   the   Circuit   Court  of   Appeals   for  the   Fifth 

Circuit. 
No.  197.    Argued  March  18,  19,  1913.    Decided  June  9,  1913. 

In  many  instances  a  man's  fate  depends  upon  his  rightly  esti- 
mating, that  is,  as  the  jury  subsequently  estimates  it,  some  matter  of 
degree,  and  there  is  no  constitutional  difficulty  in  the  way  of  en- 
forcing the  criminal  provisions  of  the  Sherman  Anti-Trust  Act  on 
the  ground  of  uncertainty  as  to  the  prohibitions. 

The  Sherman  Act  punishes  the  conspiracies  at  which  it  is  aimed 
on  the  common  law  footing  and  does  not  make  the  doing  of  any  act 
other  than  the  act  of  conspiring  a  condition  of  liability.  In  this 
respect  it  differs  from  Section  5440  and  the  indictment  need  not  aver 
overt  acts  in  furtherance  of  the  conspiracy.  Brown  v.  Elliott,  225 
U.  S.  392,  distinguished. 

This  court  can  see  no  reason  for  reading  into  the  Sherman  Act 
more  than  it  finds  there. 

It  is  not  necessary  for  an  indictment  under  the  Sherman  Act  to 
allege  or  prove  that  all  the  conspirators  proceeded  against  are  traders. 
Loewe  v.  Lawlor,  208  U.  S.  274. 

Where  the  indictment  under  the  Sherman  Act  alleges  numerous 
methods  employed  by  the  defendants  to  accomplish  the  purpose  to 
restrain  trade,  it  is  not  necessary,  in  order  to  convict,  to  prove  every 
means  alleged  but  it  is  error  to  charge  that  a  verdict  may  be  permitted 
on  any  one  of  them  when  some  of  them  would  not  warrant  a  finding 
of  conspiracy. 

186  Fed.  Rep.  489,  reversed. 


LoEWE  V.  Lawlor,  208  U.  S.  274. 

Certiorari  to  the  Circuit  Court  of  Appeals  for  the  Second 

Circuit. 
No.  389.     Argued  December  4,  5,  1907.     Decided  February 

3,  1908. 

After  the  Circuit  Court  of  Appeals  has  certified  questions  to  this 
court  and  this  court  has  issued  its  writ  of  certiorari  requiring  the 
whole  record  to  be  sent  up,  it  devolves  upon  this  court,  under  Section 
6  of  the  Judiciary  Act  of  1891,  to  decide  the  whole  matter  in  con- 


336  AtPENDIX 

troversy  in  the  same  manner  as  if  it  had  been  brought  here  for 
review  by  writ  of  error  or  appeal. 

The  Anti-Trust  Act  of  July  2,  1890,  26  Stat.  209,  has  a  broader 
application  than  the  prohibition  of  restraints  of  trade  unlawful  at 
common  law.  It  prohibits  any  combination  which  essentially  obstructs 
the  free  flow  of  commerce  between  the  states,  or  restricts,  in  that 
regard,  the  liberty  of  a  trader  to  engage  in  business ;  and  this  includes 
restraints  of  trade  aimed  at  compelling  third  parties  and  strangers 
involuntarily  not  to  engage  in  the  course  of  interstate  trade  except  on 
conditions  that  the  combination  imposes. 

A  combination  may  be  in  restraint  of  interstate  trade  and  within 
the  meaning  of  the  Anti-Trust  Act  although  the  persons  exercising 
the  restraint  may  not  themselves  be  engaged  in  interstate  trade,  and 
some  of  the  means  employed  may  be  acts  within  a  state  and  indi- 
vidually beyond  the  scope  of  federal  authority,  and  operate  to  destroy 
intrastate  trade  as  interstate  trade,  but  the  acts  must  be  considered 
as  a  whole,  and  if  the  purposes  are  to  prevent  interstate  transporta- 
tion, the  plan  is  open  to  condemnation  under  the  Anti-Trust  Act  of 
July  2,  1890.    Swift  V.  United  States,  196  U.  S.  375. 

The  Anti-Trust  Act  of  July  2,  1890,  makes  no  distinction  between 
classes.  Organizations  of  farmers  and  laborers  were  not  exempted 
from  its  operation,  notwithstanding  the  efforts  which  the  records  of 
Congress  show  were  made  in  that  direction. 

A  combination  of  labor  organizations  and  the  members  thereof, 
to  compel  a  manufacturer  whose  goods  are  almost  entirely  sold  in 
other  states,  to  unionize  his  shops  and  on  his  refusal  so  to  do  to  boy- 
cott his  goods  and  prevent  their  sale  in  states  other  than  his  own  until 
such  time  as  the  resulting  damage  forces  him  to  comply  with  their 
demands,  is,  under  the  conditions  of  this  case,  a  combination  in 
restraint  of  interstate  trade  or  commerce  within  the  meaning  of  the 
Anti-Trust  Act  of  July  2,  1890,  and  the  manufacturer  may  maintain 
an  action  for  threefold  damages  under  Section  7  of  that  act. 


GoMPERs  V.  Bucks  Stove  and  Range  Company, 
221  U.  S.  418. 

Certiorari  to  the  Court  of  Appeals  of  the  District  of  Columbia. 
No.  372.    Argued  January  27,  30,  191 1.    Decided  May  15  ,1911. 

An  order  of  a  court  of  equity,  restraining  defendants  from  boy- 
cotting complainant  by  publishing  statements  that  complainant  was 


LEGAL   CASES  AFFECTING   ASSOCIATIONS  337 

guilty  of  unfair  trade,  does  not  amount  to  an  unconstitutional  abridge- 
ment of  free  speech;  the  question  of  the  validity  of  the  order  involves 
only  the  power  of  the  court  to  enjoin  the  boycott. 

Quaere  as  to  what  constitutes  a  boycott  that  may  be  enjoined  by  a 
court  of  equity;  but,  in  order  that  it  may  be  enjoined,  it  must  appear 
that  there  is  a  conspiracy  causing  irreparable  damage  to  complain- 
ant's business  or  property. 

Where  conditions  exist  that  justify  the  enjoining  of  a  boycott, 
the  publication  and  use  of  letters,  circulars,  and  printed  matter,  may 
constitute  the  means  of  unlawfully  continuing  the  boycott  and  amount 
to  a  violation  of  the  order  of  injunction. 

The  Anti-Trust  Act  of  1890  applies  to  any  unlawful  combination 
resulting  in  restraint  of  interstate  commerce  including  boycotts  and 
blacklisting  whether  made  effective  by  acts,  words,  or  printed  matter. 
Loewe  v.  Lawlor,  208  U.  S.  274. 

The  court's  protective  powers  extend  to  every  device  whereby 
property  is  irreparably  damaged  or  interstate  commerce  restrained ; 
otherwise  the  Anti-Trust  Act  would  be  rendered  impotent. 

Society  itself  is  an  organization  and  does  not  object  to  organiza- 
tions for  social,  religious,  business,  and  all  other  legal  purposes. 

On  appeal  against  unlawfully  exercising  power  of  organizations,  it 
is  the  duty  of  government  to  protect  the  one  against  the  many  as  well 
as  the  many  against  the  one. 

An  agreement  to  act  in  concert  on  publication  of  a  signal  makes 
the  words  used  as  the  signal  amount  to  verbal  acts,  and  when  the 
facts  justify  it,  the  court  having  jurisdiction  can  enjoin  the  use  of 
the  words  in  such  connection ;  and  so  held  as  to  words  "unfair"  and 
"we  don't  patronize"  as  used  in  this  case  to  continue  a  boycott. 

Civil  and  criminal  contempts  are  essentially  different  and  are 
governed  by  different  rules  of  procedure. 

A  proceeding,  instituted  by  an  aggrieved  party  to  punish  the  other 
party  for  contempt  for  affirmatively  violating  an  injunction  in  the 
same  action  in  which  the  injunction  order  was  issued,  and  praying  for 
damages  and  costs,  is  a  civil  proceeding  in  contempt,  and  is  part  of 
the  main  action,  and  the  court  cannot  punish  the  contempt  by  im- 
prisonment for  a  definite  term ;  the  only  punishment  is  by  fine  meas- 
ured by  the  pecuniary  injury  sustained. 

In  criminal  proceedings  for  contempt  the  party  against  whom  the 
proceedings  are  instituted  is  entitled  to  the  protection  of  the  consti- 
tutional provisions  against  self-incrimination. 


338  APPENDIX 

There  is  a  substantial  variance  between  the  procedure  adopted 
and  punishment  imposed,  when  a  punitive  sentence  appropriate  only 
to  a  proceeding  for  criminal  contempt  is  imposed  in  a  proceeding  in 
an  equity  action  for  the  remedial  relief  of  an  injured  party. 

Where  the  main  suit  in  which  an  injunction  order  has  been  granted 
is  settled  and  discontinued,  every  proceeding  which  is  a  part  thereof, 
or  dependent  thereon,  is  also  necessarily  settled  as  between  the 
parties;  and  so  held  as  to  a  proceeding  instituted  by  the  party  ag- 
grieved against  the  other  party  for  violation  of  an  injunction. 

The  fact  that  the  party  aggrieved  by  the  violation  of  an  injunc- 
tion deprives  himself,  by  settling  the  main  case,  of  the  right  to  pur- 
sue the  violator  for  contempt,  does  not  prevent  the  court  whose  order 
was  violated  from  instituting  proceedings  to  vindicate  its  authority ; 
and  in  this  case  the  dismissal  of  the  civil  contempt  proceeding  is 
without  prejudice  to  the  power  and  right  of  the  court  whose  injunc- 
tion was  violated  to  punish  for  contempt  by  proper  proceedings. 

33  App.  D.  C.  516,  reversed. 


United  States  v.  Trans-Missouri  Freight  Association, 

166  U.  S.  290. 

Appeal  from  the  Circuit  Court  of  Appeals  for  the  Eighth 

Circuit. 
No.  67.    Argued  December  8,  9,  1896.    Decided  March  22,  1897, 

The  dissolution  of  the  freight  association  does  not  prevent  this 
court  from  taking  cognizance  of  the  appeal  and  deciding  the  case  on 
its  merits;  as,  where  parties  have  entered  into  an  illegal  agreement 
and  are  acting  under  it,  and  there  is  no  adequate  remedy  at  law,  and 
the  jurisdiction  of  the  court  has  attached  by  the  filing  of  a  bill  to 
restrain  such  or  like  action  under  a  similar  agreement,  and  a  trial 
has  been  had  and  judgment  entered,  the  appellate  jurisdiction  of  this 
court  is  not  ousted  by  a  simple  dissolution  of  the  association,  effected 
subsequently  to  the  entry  of  judgment  in  the  suit. 

While  the  statutory  amount  must  as  a  matter  of  fact  be  in  con- 
troversy, yet  the  fact  that  it  is  so  need  not  appear  in  the  bill,  but  may 
be  shown  to  the  satisfaction  of  the  court. 

The  provisions  respecting  contracts,  combinations  and  conspiracies 
in  restraint  of  trade  or  commerce  among  the  several  states  or  with 
foreign  countries,  contained  in  the  act  of  July  2,  1890,  c.  647,  "to 


LEGAL    CASES   AFFECTING   ASSOCIATIONS  339 

protect  trade  and  commerce  against  unlawful  restraints  and  monopo- 
lies," apply  to  and  cover  common  carriers  by  railroad;  and  a  contract 
between  them  in  restraint  of  such  trade  or  commerce  is  prohibited, 
even  though  the  contract  is  entered  into  between  competing  railroads 
only  for  the  purpose  of  thereby  affecting  traffic  rates  for  the  transpor- 
tation of  persons  and  property. 

The  act  of  February  4,  1887,  c.  104,  "to  regulate  commerce,"  is 
not  inconsistent  with  the  act  of  July  2,  1890,  as  it  does  not  confer 
upon  competing  railroad  companies  power  to  enter  into  a  contract  in 
restraint  of  trade  and  commerce,  like  the  one  which  forms  the  subject 
of  this  suit. 

Debates  in  Congress  are  not  appropriate  sources  of  information 
from  which  to  discover  the  meaning  of  the  language  of  a  statute 
passed   by  that  body. 

The  prohibitory  provisions  of  the  said  act  of  July  2,  1890,  apply 
to  all  contracts  in  restraint  of  interstate  or  foreign  trade  or  commerce 
without  exception  or  limitation ;  and  are  not  confined  to  those  in  which 
the  restraint  is  unreasonable. 

In  order  to  maintain  this  suit  the  government  is  not  obliged  to 
show  that  the  agreement  in  question  was  entered  into  for  the  purpose 
of  restraining  trade  or  commerce,  if  such  restraint  is  its  necessary 
efifect. 

This  agreement,  though  legal  when  made,  became  illegal  on  the 
passage  of  the  act  of  July  2,  1890,  and  acts  done  under  it  after  that 
statute  became  operative  were  done  in  violation  of  it. 

The  fourth  section  of  the  act  invests  the  government  with  full 
power  and  authority  to  bring  such  a  suit  as  this;  and,  if  the  facts 
alleged  are  proved,  an  injunction  should  issue. 


Anheuser  Busch  Brewing  Company  v.  Houck,  et  al.,  27 
Southwestern  692  (Court  of  Civil  Appeals  of  Texas). 

In  this  case  the  plaintiff  had  agreed  to  sell  its  product  to  the 
defendants  for  one  year  and  not  to  sell  to  any  other  person  at  the 
same  place.  Defendants  thereafter  entered  into  a  combination  with 
other  dealers  in  the  same  product,  which  combination  constituted  a 
violation  of  the  state  antitrust  law.  The  plaintiff  refused  to  deliver 
its  product  to  the  defendants  and  sued  for  the  price  of  goods  already 
furnished  under  the  contract. 


340  APPENDIX 

Held,  that  where  the  buyer  enters  into  an  illegal  combination  with 
others  involving  the  use  of  goods  purchased  from  the  seller,  seller  is 
justified  in  refusing  to  furnish  further  goods  under  the  contract 
which  would,  in  effect,  further  the  illegal  combination  and  such  re- 
pudiation by  the  seller  (plaintiff)  is  no  defense  to  an  action  by  the 
seller  for  the  price  of  goods  previously  furnished. 


United  States  v.   Coal  Dealers  Association  of  Cali- 
fornia, ET  AL.,  85  Fed.  252   (Circuit  Court,  Northern 
District  of  California,  1898). 

This  was  a  case  in  equity  and  the  report  deals  with  the  hearing 
on  a  motion  to  dissolve  a  restraining  order  which  had  been  issued 
without  notice  pending  a  motion  for  a  preliminary  injunction.  The 
motion  for  the  preliminary  injunction  was  heard  at  the  same  time  and 
the  preliminary  injunction  granted. 

Held,  that  where  an  association  of  local  coal  dealers  combines 
with  importers  and  wholesale  dealers  in  coal,  whereby  the  price  of  the 
product  to  consumers  is  fixed  with  penalties  for  violation  of  the 
agreement  to  maintain  the  price,  and  the  price  to  be  charged  by  the 
wholesale  dealers  was  fixed  at  a  higher  rate  to  non-members  than 
to  members  of  the  association,  the  agreement  containing  provisions 
against  sales  by  wholesalers  to  consumers  at  less  than  the  price  fixed 
for  sales  by  retail  dealers,  such  an  agreement  constitutes  a  combina- 
tion and  violation  of  the  Sherman  Act,  as  by  the  combination  free 
competition  is  eliminated  and  this  constitutes  a  combination  in  re- 
straint of  trade. 


Ford  v.  Chicago  Milk  Shippers  Association,  155  III.  166. 

Held,  plaintiff  cannot  recover  for  milk  sold  and  delivered  to  the 
defendant  where  such  milk  had  been  sold  by  it  in  pursuance  of  an 
agreement  and  combination  whereby  the  plaintiff  and  its  stockholders 
combined  to  fix  the  price  and  the  supply  of  milk  to  be  sold  in  the  city 
of  Chicago,  this  combination  being  a  violation  of  the  state  antitrust 
law. 


LEGAL   CASES   AFFECTING   ASSOCIATIONS  341 

LowRY  V.  TiLE^  Mantel  and  Grate  Association, 
98  Fed.  817. 

This  case  arose  on  demurrer  to  the  complaint  and  in  overruling 
the  demurrer  it  was — 

Held,  that  a  complaint  alleging  that  members  of  an  association 
have  conspired  and  combined  to  raise  the  price  of  tiles,  mantels  and 
grates  to  control  the  output  and  to  regulate  prices  of  these  com- 
modities, v^^ith  intent  to  monopolize  the  trade  and  commerce  between 
other  states  and  California  in  regard  to  such  commodities  as  well  as 
to  arbitrarily  fix  their  prices  independent  of  their  natural  market 
price,  brings  the  case  within  the  Anti-Trust  Act  of  July  2,  1890 
(Sherman  Act). 


People  v.  Sheldon,  139  N.  Y.  251. 

Held,  that  where  defendants  enter  into  an  organization  agreement 
for  the  purpose  of  controlling  the  price  and  managing  the  business 
of  the  sale  of  coal  so  as  to  prevent  competition  in  price  between  the 
members  of  the  organization,  such  an  agreement  is  illegal. 

Held  also,  if  such  an  intent  is  established  and  the  price  is  raised 
in  pursuance  of  the  agreement,  the  crime  of  conspiracy  is  established. 

Held  also,  that  the  overt  act  necessary  to  sustain  a  conviction  for 
conspiracy  need  not  be  one  which  might  injuriously  affect  the  public. 


Wheeler-Stenzel  Company  v.  National  Window  Glass 

Jobbers  Association,  152  Fed.  864  (3RD  Circuit  Court  of 

Appeals,  1907). 

Action  for  treble  damages  under  the  Sherman  Act,  on  appeal  from 
a  judgment  sustaining  a  demurrer  to  the  declaration.  The  circuit 
court  of  appeals  reversed  the  judgment  of  the  district  court  and 
overruled  the  demurrer. 

Held,  that  where  a  declaration  alleges  that  certain  named  jobbers 
and  wholesale  dealers  doing  business  in  different  states  were  up  to  a 
certain  date  uncombined  and  competed  freely  with  each  other  and 
with  other  wholesale  dealers,  but  that  on  such  date  such  jobbers  and 
wholesale  dealers  entered  into  an  agreement  with  the  defendant  and 
with  a  manufacturer  which  owned  and  operated  factories  in  different 
states,  by  which  agreement  defendants  and  such  dealers  agreed  to 


342  APPENDIX 

buy  from  no  other  manufacturer  unless  at  materially  lower  prices  and 
such  manufacturer  agreed  to  sell  to  no  other  dealer  except  at  higher 
prices  than  it  charged  them,  that  such  agreement  further  limited  the 
quantity  of  window  glass  to  be  purchased  and  gave  power  to  fix 
excessive  and  unreasonable  charges  to  be  charged  retail  dealers  and 
provided  for  penalties  for  violation  of  the  agreement  to  charge  such 
prices,  restricted  and  limited  the  territory  within  which  such  dealers 
should  sell,  such  declaration  charges  a  contract  or  combination  in  re- 
straint of  interstate  commerce  and  a  violation  of  the  Anti-Trust  Act. 

Held  further,  such  a  contract  is  per  se  unlawful  and  not  merely 
unenforcible,  and  one  who  is  harmed  in  his  business  or  property  by 
such  contract  or  combination  has  suffered  a  legal  injury  for  which  a 
right  of  action  is  given  by  Section  7. 

Held  also,  if  the  declaration  sufficiently  charges  a  contract  or  com- 
bination in  violation  of  the  Sherman  Act,  general  allegations  showing 
that  the  result  was  to  deprive  plaintiff  of  customers  and  prevent  it 
from  making  a  profit  in  its  legitimate  business  are  sufficient  to  sup- 
port such  action. 


Clabaugh  v.  Southern  Wholesale  Grocers  Association, 

181    Fed.    706    (Circuit   Court,   Northern   District   of 

Alabama,  1910). 

Action  for  damages  under  the  Sherman  Act.  Here  the  plaintiff 
had  previously  sued  the  president  of  the  association  who  had  settled 
the  previous  action  and  paid  the  plaintiff  the  amount  agreed  upon  in 
settlement. 

Held,  such  settlement  was  an  accord  and  satisfaction  of  the  entire 
claim  and  a  bar  to  the  second  suit. 


United    States    v.     Eastern    States    Retail    Lumber 

Dealers   Association,    201    Fed.    581    (District   Court, 

Southern  District  of  New  York). 

Suit  in  equity  under  the  Sherman  Act  in  which  a  decree  was 
entered  for  the  complainant  restraining  certain  activities  of  the  de- 
fendant.   Upon  appeal  to  the  Supreme  Court  the  decree  was  affirmed. 

234  U.  S.  600.  Here  the  association  issued  official  reports  con- 
taining lists  of  wholesale  dealers  doing  an  interstate  business  who 


LEGAL    CASES    AFFECTING   ASSOCIATIONS  343 

made  sales  direct  to  consumers.  Such  association  endeavored  to 
secure  information  concerning  such  sales  by  wholesalers  and  used  its 
official  reports  for  tlie  purpose  and  effect  of  influencing  members  re- 
ceiving such  reports  to  cease  buying  from  such  wholesale  dealers. 

Held,  words  "restraint  of  trade"  as  used  in  the  Sherman  Act  are 
to  be  construed  as  including  "restraint  of  competition,"  and  such  activi- 
ties of  the  combination  were  in  restraint  of  competition  and  should 
be  enjoined. 


United  States  v.  Southern  Wholesale  Grocers  Associa- 
tion, 207  Fed.  434. 

This  was  a  proceeding  for  criminal  contempt  against  the  de- 
fendants in  violating  a  final  decree  entered  by  consent  of  the  parties 
in  a  prior  prosecution  under  the  Sherman  Act.  By  the  decree  the 
association  was  not  dissolved  but  certain  activities  were  enjoined,  the 
decree  expressly  providing  that  the  association,  its  officers  and  mem- 
bers were  not  restrained  from  maintaining  the  organization  for 
social  or  other  purposes  than  those  therein  prohibited.     Held,  that: 

1.  Mere  maintenance  of  the  association  was  not  a  violation  to  the 
decree. 

2.  A  contract  between  many  engaged  in  the  same  business  to 
refrain  from  selling  to  an  individual  or  class  would  be  an  illegal 
restraint  of  trade  under  the  Sherman  Act,  whether  the  contract  were 
express  or  implied  or  consisted  of  a  mere  combination  or  conspiracy 
to  accomplish  that  end,  or  without  any  definite  form  of  agreement. 

3.  Where  an  association  of  wholesale  grocers  required  prospective 
members  to  promise  not  to  sell  direct  to  consumers,  such  a  requirement 
was  not  illegal  as  it  was  merely  a  promise  required  to  convince  the 
association  that  there  was  a  reasonable  expectation  on  the  part  of 
the  applicant  that  he  would  remain  eligible  for  membership,  as  the 
membership  was  composed  exclusively  of  wholesalers. 

4.  The  prior  decree  enjoined  the  association,  etc.,  from  doing  any 
act  to  hinder  or  prevent  anyone  from  selling  any  commodity  to  any 
other  person  at  any  price  agreed  upon.  That  continuing  to  send  cer- 
tain lists  to  manufacturers  constituted  a  violation  of  the  decree, 
although  no  coercion  was  used  to  compel  manufacturers  not  to  sell  to 
anyone  whose  name  did  not  appear  upon  the  list,  since  by  continuing 
to  send  out  such  list  the  association  utilized  the  influence  over  the 
manufacturers  which  its  previous  policy  had  gained  for  it. 


344  APPENDIX 

5.  Addressing  legitimate  argument  to  manufacturers,  to  procure 
abandonment  of  a  certain  policy  or  the  continuance  of  another  does 
not  violate  the  Sherman  Act. 

6.  Where  an  association,  its  directors,  officers,  etc.,  had  been  en- 
joined from  using  coercion  or  intimidation  to  prevent  manufacturers 
from  selling  direct  to  retailers,  and  a  director  later  makes  use  of  the 
association's  name  and  his  position  as  director  to  prevent  such  direct 
sales  by  a  manufacturer,  lack  of  authority  as  director  to  take  such 
action  might  exonerate  the  association  but  does  not  exonerate  the 
director,  and  such  activity  constitutes  a  violation  of  the  decree. 

7.  Writing  of  letters  criticizing  the  government  and  the  litigation 
instituted  by  it  resulting  in  an  injunction  but  not  directly  calculated 
to  incite  disobedience  to  the  injunction  is  not  a  contempt. 


APPENDIX  C 

TRADE  ASSOCIATIONS  IN  THE  UNITED  STATES 

The  accompanying  list  of  the  trade  associations  in  the 
United  States  is  based  upon  ( i )  the  Hst  compiled  and  revised 
to  November  i,  191 9,  by  the  Bureau  of  Foreign  and  Domestic 
Commerce  of  the  Department  of  Commerce,  and  (2)  the 
membership  list  of  the  American  Trade  Association  Execu- 
tives, and  (3)  correspondences. 

Additions  and  corrections  have  been  made  to  the  compre- 
hensive list  thus  obtained  to  bring  it,  as  near  as  possible,  up  to 
date.  It  is  fair  to  state  that  this  is  the  most  complete  list  of 
trade  associations  yet  compiled.  That  it  is  by  any  means 
perfect  is  not  claimed,  however,  and  if  any  additions,  elimina- 
tions, or  corrections  should  be  made,  the  author  would  be 
pleased  to  be  informed.  In  compiling  this  list  only  those  trade 
associations  which  relate  to  the  whole  or  part  of  a  specific 
trade  have  been  included.  This  excludes  associations  of  em- 
ployers, state  manufacturers,  associated  industries,  etc.,  which 
represent  various  trades  and  are  not  strictly  trade  associations 
any  more  than  are  commercial  organizations. 

In  this  list  of  trade  associations  there  are  many  bad  as  well 
as  good  examples  of  names.  The  words  "American"  and 
"National"  are  overworked,  and  should  be  left  alone  in  any 
future  christening  of  a  new  association.  If  some  word  similar 
to  these  two  must  be  used,  "United  States"  has  not  been 
favored  as  much  as  it  might. 

It  is  interesting  to  note  the  various  divisions  of  associations 
of  some  national  products.  It  will  be  seen  that  the  different 
grades  in  a  product  are  gradually  becoming  more  and  more 
organized  in  their  distinctive  fields,  but  quite  frequently  as  a 

345 


346  APPENDIX 

part  of  some  large  parent  or  centralized  association.  Nearly 
every  great  industry,  in  fact,  maintains  more  than  one  trade 
association.  Not  infrequently  there  will  be  a  general  associa- 
tion that  speaks  for  the  industry  as  a  whole,  but  within  the 
industry  the  various  divisions  of  product  are  represented 
by  smaller  or  more  concentrated  associations. 

For  example,  the  American  Paper  and  Pulp  Association 
on  general  matters  represents  the  paper  and  pulp  industry,  and 
yet  that  association  has  no  control  over  the  various  associations 
which  make  up  its  membership,  any  more  than  these  various 
associations  have  control  over  the  individual  activities  of  any 
of  the  manufacturers  which  make  up  their  respective  member- 
ships. The  American  Paper  and  Pulp  Association  is  composed 
of  the  following  organizations: 

American  Paper  and  Pulp  Mill  Superintendents  Association 

Binders  Board  Manufacturers  Association 

Book  Paper  Manufacturers  Association 

Cardboard  Manufacturers  Association 

Cost  Association  of  the  Paper  Industry 

Cover  Paper  Manufacturers  Association 

Glazed  and  Fancy  Paper  Manufacturers  Association 

Grocery  Bag  Manufacturers  Service  Bureau 

Pulp  Manufacturers  Association 

Salesmens  Association  of  the  Paper  Industry 

Technical  Association  of  the  Pulp  and  Paper  Industry 

Tissue  Paper  Manufacturers  Association 

Toilet  Paper  Converters  Association 

Waterproof  Wrapping  Paper  Manufacturers  Association 

Waxed  Paper  Manufacturers  Association 

Wrapping  Paper  Manufacturers  Service  Bureau 

Writing  Paper  Manufacturers  Association 

Another  example  of  this  same  sort  is  the  Music  Industries 
Chamber  of  Commerce,  which  is  composed  of  the  following 
divisional  members: 

National  Piano  Manufacturers  Association  of  America 
National  Association  of  Music  Merchants 


TRADE   ASSOCIATIONS    IN   THE  U.    S.  347 

Organ  Builders  Association  of  America 

National  Music  Roll  Manufacturers  Association 

National  Musical    Merchandise    Association   of    the    United 

States 
Musical  Supply  Association  of  America 
Music  Publishers  Association  of  the  United  States 
Band  Instrument  Manufacturers  Association 
National  Association  of  Talking  Machine  Jobl)ers 
National  Piano  Travelers  Association 
National  Association  of  Piano  Tuners 

These  two  cases  are  sufficient  to  show  that  just  as  it  is 
advantageous  for  individual  manufacturers  to  get  together 
in  a  divisional  trade  association  of  a  large  industry,  so  it  is 
advantageous  for  the  various  divisional  associations  to  unite 
in  a  large  parent  or  general  association,  which  can  represent 
the  industry  in  general  matters,  bring  the  weight  of  all  the 
related  interests  to  bear  on  issues  of  mutual  interest  and  save 
duplication  or  conflict  of  effort. 

The  government  list  of  trade  associations,  published  by  the 
Bureau  of  Foreign  and  Domestic  Commerce,  which  is  revised 
every  three  or  four  years,  can  be  purchased  for  15  cents  a  copy 
from  the  Superintendent  of  Documents,  Government  Printing 
Office,  Washington,  D.  C. 

There  are  three  well-known  associations  of  trade  executives; 
the  secretary's  office  is  given  with  each: 

American   Trade    Association   Executives,    Room    616,    Flatiron 

Building,  New  York. 
Trade  Organization  Secretaries  in  New  York  City,  450  4th  Ave., 

New  York. 
Business  Secretaries  Forum,  Room   121 5,   Monadnock  Building, 

Chicago,  Illinois. 

The  first  of  these  three  is  the  national  association  with  a 
large  membership  of  trade  executives  both  in  the  United  States 
and  Canada.  It  meets  once  a  year.  The  other  two  hold 
monthly  meetings.    The  purpose  of  all  three  is  mutual  aid. 


348  APPENDIX 


Abrasive  Paper  and  Cloth  Manufacturers  Exchange,  17  Battery  PI., 
New  York. 

Agricultural  Publishers  Association,  76  W.  Monroe  St.,  Chicago,  111. 

Air  Brake  Association,  165  Broadway,  New  York. 

Allied  Wall-Paper  Industry,  1328  Broadway,  New  York. 

Amalgamated  Lithographers  of  America,  309  Broadway,  New  York. 

American  Association  of  Baking  Industries,  1405  Ashland  Blk.,  Chi- 
cago, 111. 

American  Association  of  the  Baking  Industry,  367  S.  Boulevard, 
New  York. 

American  Association  of  Creamery  Butter  Manufacturers,  Chicago, 
111. 

American  Association  of  Flint  and  Lime  Glass  Manufacturers,  Inc., 
44  Conestoga  Bldg.,  Pittsburgh,  Pa. 

American  Association  of  Foreign  Language  Newspapers,  233  Broad- 
way, New  York. 

American  Association  of  Refrigeration,  431  S.  Dearborn  St.,  Chi- 
cago, 111. 

American  Association  of  Wholesale  Hatters,  c/o  The  Callaway  Bank, 
Fulton,  Mo. 

American  Association  of  Wholesale  Opticians,  1475  Broadway,  New 
York. 

American  Association  of  Woolen  and  Worsted  Manufacturers,  45  E. 
17th  St.,  New  York. 

American  Automobile  Association,  Torrington,  Conn. 

American  Bankers  Association,  5  Nassau  St.,  New  York. 

American  Board  of  Scrap  Iron  Dealers,  Philadelphia,  Pa. 

American  Boiler  Manufacturers  Association,  191  Dikeman  St.,  Brook- 
lyn, N.  Y. 

American  Booksellers  Association,  c/o  Publishers'  Weekly,  62  W. 
45th  St.,  New  York. 

American  Cane  Growers  Exchange,  New  Orleans,  La. 

American  Clothing  Manufacturers  Association,  752  Broadway,  New 
York. 

American  Concrete  Institute,  244  Madison  Ave.,  New  York. 

American  Concrete  Pipe  Association,  Chicago,  III. 

American  Corn  Millers  Federation,  Chicago,  111. 

American  Cotton  Waste  Exchange,  200  Summer  St.,  Boston,  Mass. 


TRADE   ASSOCIATIONS    IN    THE    U.    S.  349 

American  Cranberry  Growers  Association,  Toms  River,  N.  J. 
American  Cutlery  Industry,  15  Park  Row,  New  York,  N.  Y. 
American  Drug   Manufacturers   Association,    1050   Penobscot   Bldg., 

Detroit,  Mich. 
American  Dyes  Institute,  130  W.  42nd  St.,  New  York. 
American  Electric  Railway  Association,  8  W.  40th  St.,  New  York. 
American  Envelope  Manufacturers  Association.  120  Broadway,  New 

York. 
American  Exporters  and  Importers  Association,  17  Battery  PL,  New 

York. 
American  Face  Brick  Association,  no  S.  Dearborn  St.,  Chicago,  111. 
American  Feed  Manufacturers  Association,  Milwaukee,  Wis. 
American  Florists    and    Ornamental     Horticulturists     Society,     11 70 

Broadway,  New  York. 
American  Forestry  Association,  Washington,  D.  C. 
American  Foundrymens  Association,  Chicago,  111. 
American  Fruit  and  Vegetable  Shippers  Association,  Chicago,  111. 
American  Fur  Dealers  Association,  46  W.  24th  St.,  New  York. 
American  Gas  Association,  130  E.  15th  St.,  New  York. 
American  Gear   Manufacturers  Association,   Stenton   and   Wyoming 

Aves.,  Philadelphia,  Pa. 
American  Hardware  Manufacturers  Association,  233  Broadway,  New 

York. 
American  Hardwood  Manufacturers  Association,  Memphis,  Tenn. 
American  Hotel  Association,  Auditorium  Tower,  Chicago,  111. 
American  Incubator  Manufacturing  Association,  Lincoln,  Neb. 
American  Industrial  Licensed  Lenders  Association,  204  Chestnut  St., 

Harrisburg,  Pa. 
American  Institute  of  Accountants,  i  Liberty  St.,  New  York. 
American  Institute  of  Lead  Manufacturers,  90  West  St..  New  York. 
American  Iron,  Steel  and  Heavy  Hardware  Association,  47  W.  34th 

St.,  New  York. 
American  Iron  and  Steel  Institute.  61   Broadway,  New  York. 
American  Lace  Manufacturers  Association,   1403  Turks  Head  Bldg.. 

Providence,  R.  I. 
American  Malleable  Castings  Association,  Cleveland,  Ohio. 
American  Manufacturers  Association    of    Products   of   Corn,    Room 

837,  208  S.  La  Salle  St.,  Chicago,  111. 
American  Meat  Institute,  116  Nassau  St.,  New  York. 
American  Meat  Packers  Association,  New  York. 


350  APPENDIX 

American  Medical  Trade  Association,  5  S.  Wabash  Ave.,  Chicago,  111. 
American  Men's  and  Boys'  Clothing  Manufacturers  Association,  New 

York. 
American  National  Live  Stock  Association,  Denver,  Colo. 
American  National  Retail  Jewelers  Association,  Neenah,  Wis. 
American  Newspaper    Publishers   Association,    63    Park   Row,   New 

York. 
American  Olive  Oil  Importers  Association,  New  York. 
American  Paper  and  Pulp  Association,  18  E.  41st  St.,  New  York. 
American  Paper  and  Pulp  Mill  Superintendents  Association,  3340  N. 

Paulina  St.,  Chicago,  111. 
American  Peat  Society,  New  York. 

American  Petroleum  Institute,  19  W.  44th  St.,  New  York. 
American  Petroleum  League,  Chicago,  111. 
American  Pharmaceutical  Association,  Philadelphia,  Pa. 
American  Photo-Engravers  Association,  Chicago,  111. 
American  Pocket  Knife  Industry,  Rochester,  N.  Y. 
American  Poultry  Association,  Fort  Wayne,  Ind. 
American  Railroads  Association,  75  Church  St.,  New  York. 
American  Road  Builders  Association,  150  Nassau  St.,  New  York. 
American  Seed  Trade  Association,  Cleveland,  Ohio. 
American  Shovel  Institute,  Pittsburgh,  Pa. 

American  Soda  Pulp  Export  Association,  200  Fifth  Ave.,  New  York. 
American  Specialty  Manufacturers  Association,  299  Broadway,  New 

York. 
American  Spice  Trade  Association,  124  Front  St.,  New  York. 
American    Staple   Manufacturers   Association,    120   Broadway,   New 

York. 
American  Steamship  Association,  17  Battery  PI.,  New  York. 
American  Supply    and    Machinery    Manufacturers    Association,    233 

Broadway,  New  York. 
American  Surgical  Trade  Association,  109  N.  Wabash  St.,  Chicago, 

111. 
American  Tack    Manufacturers    Association,    120    Broadway,    New 

York. 
American  Walnut  Manufacturers  Association,   115   Broadway,   New 

York,  and  616  S.  Michigan  Ave.,  Chicago,  111. 
American  Warehousemens  Association,  Pittsburgh,  Pa. 
American  Washing    Machine    Manufacturers   Association,    638   Otis 

Bldg.,  10  S.  La  Salle  St.,  Chicago,  111. 


TRADE   ASSOCIATIONS    IN   THE   U.    S.  351 

American  Welding  Society,  29  W.  39th  St.,  New  York. 

American  Wholesale  Coal  Association,  Chicago,  111. 

American  Wholesale   Garment  Association,    1219  Washington   Ave., 

St.  Louis,  Mo. 
American  Wholesale    Lumber   Association,   620   S.    Michigan    Blvd., 

Chicago,  111. 
American  Wine  Growers  Association,  New  York. 
American  Wood   Preservers   Association,   Mt.   Royal   Station,   Balti- 
more, Md. 
American  Wool  Improvement  Association,  Rawlins,  Wyo. 
American  Zinc  Institute,  27  Cedar  St.,  New  York. 
Amusement  Poster  Manufacturers  Association,  8  W.  40th  St.,  New 

York. 
Anthracite  Coal  Operators  Association,  107  S.  Main  St.,  Bethlehem,  Pa. 
Apple  Growers  Association,  204  Franklin  St.,  New  York. 
Architectural   Iron   and   Bronze   Manufacturers,   331   Madison   Ave., 

New  York. 
Arkansas  Soft  Pine  Bureau,  Little  Rock,  Arkansas. 
Asbestos  Paper  Manufacturers  Association,  Philadelphia,  Pa. 
Asbestos  Textile  Manufacturers  Association,  Philadelphia,  Pa. 
Asphalt  Association,  25  W.  43rd  St.,  New  York. 
Associated  Business  Papers,  Inc.,  220  W.  42nd  St.,  New  York. 
Associated  Cooperage  Industries  of  America,  C-20  Railway  Exchange 

Bldg.,  St.  Louis,  Mo. 
Associated  Dress  Industries  of  America,  14th  Floor,  The  Annex,  32nd 

St.  and  Broadway,  New  York. 
Associated  Flower  and  Fancy   Feather  Manufacturers  of  America, 

135  ^V.  35th  St.,  New  York. 
Associated  Fur  Manufacturers,  303  Fifth  Ave.,  New  York. 
Associated  General  Contractors  of  America,  51  Chambers  St.,  New 

York,  and  Chicago,  111. 
Associated  Leather  Goods  Manufacturers  of  the  U.  S.,  79  Fifth  Ave., 

New  York. 
Associated  Manufacturers  of  Electrical  Supplies,  30  E.  42nd  St.,  New 

York. 
Associated  Manufacturers  of  Saddlery  Accessories,  Syracuse,  N.  Y. 
Associated  Medical  Publishers,  47  W.  34th  St.,  New  York. 
Associated  Metal  Lath  Manufacturers,  Edison  Bldg.,  Chicago,  111. 
Associated  Office  Furniture  Manufacturers,   549   Monadnock   Bldg., 

Chicago,  111. 


352  APPENDIX 

Associated  Office  Furniture  Manufacturers,  8oi  Michigan  Trust 
Bldg.,  Grand  Rapids,  Mich. 

Associated  Tile  Manufacturers,  Beaver  Falls,  Pa. 

Associated  Wooden  Ware  Manufacturers,  79  W.  Monroe  St.,  Chi- 
cago, 111. 

Association  of  Alaska  Salmon  Packers,  Seattle,  Wash. 

Association  of  American  Steel  Manufacturers,  Pittsburgh,  Pa. 

Association  of  American  Wood  Pulp  Importers,  New  York. 

Association  of  Color  Lithographers,  8  W.  40th  St.,  New  York. 

Association  of  Cotton  Textile  Merchants  of  New  York,  70  Worth 
St.,  New  York. 

Association  of  Creosoting  Companies  of  the  Pacific  Coast,  Seattle, 
Wash. 

Association  of  Dealers  in  Mason  Building  Material,  18  Broadway, 
New  York. 

Association  of  Hatband  Manufacturers,  299  Broadway,  New  York. 

Association  of  Ice  Cream  Supply  Men.  150  Nassau  St.,  New  York. 

Association  of  Limb  Manufacturers  of  America,  Washington,  D.  C. 

Association  of  Lock  Washer  Manufacturers,  320  Broadway,  New 
York. 

Association  of  Manufacturers  of  Chilled  Car  Wheels,  Chicago,  111. 

Association  of  Manufacturers  of  Pyroxylin  Compounds,  200  Fifth 
Ave.,  New  York. 

Association  of  Manufacturers  of  Window  Shades  and  Shade  Cloth, 
320  Broadway,  New  York. 

Association  of  National  Advertisers,  Inc.,  15  E.  26th  St.,  New  York. 

Association  of  Natural  Gas  Supply  Men,  21 14  Farmers  Bank  Bldg., 
Pittsburgh,  Pa. 

Association  of  Northwestern  Shipbuilders,  Seattle,  Wash. 

Association  of  Railway  Supply  Men,  Chicago,  111. 

Association  of  Shirt  Manufacturers,  New  York. 

Association  of  Trust  Companies  and  Banks  in  Their  Fiduciary  Ca- 
pacity, 214  Broadway,  New  York. 

Association  of  Vitrified  Pipe  Manufacturers,  519  Second  National 
Bldg.,  Akron,  Ohio. 

Association  of  Wood  Pulp  Importers,  33  W.  42nd  St.,  New  York, 

Athletic  Underwear  and  Nightwear  Manufacturing,  320  Broadway, 
New  York. 

Atlantic  Chairmakers  Association,  Gardner,  Mass. 

Atlantic  Coast  Shipbuilders  Association,  30  Church  St.,  New  York. 


TRADE   ASSOCIATIONS    IN   THE    U.    S.  353 

Automobile  Dealers  Association,  Inc.,  1845  Broadway,  New  York. 
Automotive  Equipment   Association,    1818   City   Hall    Square    Bldg., 

Chicago,  111. 
Automotive  Wood  Wheel  Manufacturers  Association,  105  W.  Monroe 

St.,  Chicago,  111. 

B 

Baltimore  and  Southern  Paper  Trade  Association,  36  S.  Hanover  St., 

Baltimore,  Md. 
Baltimore  Stationers  Association,  229  Park  Ave.,  Baltimore,  Md. 
Band  Instrument  Manufacturers  Association,  c/o  Lyons  and  Healy, 

Chicago,  111. 
Barbers  Supply  Dealers  Association  of  America,  25  W.  42nd  St.,  New 

York. 
Bicycle  Manufacturers  Association,  Hartford,  Conn. 
Binders    Board    Manufacturers    Association,    c/o    Riverside    Paper 

Manufacturing  Co.,  Welles  St.,  Glastonbury,  Conn. 
Biscuit  and  Crackers   Manufacturers  of  the  United   States,  90  W. 

Broadway,  New  York. 
Board  of  Trade  of  the  Fur  Industry,  303  Fifth  Ave.,  New  York. 
Bolster  and  Side  Frame  Association,  721  First  National  Bank  Bldg., 

Chicago,  111. 
Book  Paper  Manufacturers  Association,  18  E.  41st  St.,  New  York. 
Boston  Paper  Trade  Association,  Boston,  Mass. 
Boston  Stationers  Association,  c/o  George  E.  Damon  Co..  7  Pember- 

ton  Sq.,  Boston,  Mass. 
Box  Board  Manufacturers  Association,  1410  G  St.,  N.  W.,  Washing- 
ton, D.  C. 
Brass    and    Copper    Statistical    Exchange,     17    Battery    PI.,    New 

York. 
Bridge    Builders    and    Structural     Society,    50    Church     St.,    New 

York. 
Bright  Wire  Goods  Manufacturers,  2  Rector  St.,  New  York. 
Buffalo  Stationers  Club,  Buffalo,  N.  Y. 
Builders  Hardware  Manufacturers  Service  Bureau.  2  Rector  St.,  New 

York. 
Bureau  of  Envelope  Manufacturers  of  America,  120  Broadway,  New 

York. 
Button  Manufacturers  Association,  1182  Broadway,  New  York. 


354  APPENDIX 


Canadian  Paper  Box  Manufacturers  Association,  24  King  St.,  West, 

Toronto,  Canada. 
Canadian  Paper  Trade  Association,  'Ji  King  St.,  West,  Toronto,  Can. 
Canadian  Pulp  and  Paper  Association,  The,  Drummond  Bldg.,  Mon- 
treal, Canada. 
Canning  Machinery  and  Supplies  Association,  Cadiz,  Ohio. 
Cardboard  Manufacturers  Association,  Falulah  Paper  Co.,  Fitchburg, 

Mass. 
Carpet  Association  of  America,  Inc.,  38  E.  26th  St.,  New  York. 
Carriage   Builders   National  Association  of  the  United   States,   128 

Opera  PI.,  Cincinnati,  Ohio. 
Cartage  Exchange  of  Chicago,  310  Tacoma  Bldg.,  Chicago,  111. 
Carton  Club  of  Chicago,  1803  City  Hall  Square  Bldg.,  Chicago,  111. 
Casket  Manufacturers  Association  of  America,  301  Odd  Fellows  Tem- 
ple, Cincinnati,  Ohio. 
Cement  Manufacturers  Protective  Association,  19  W.  44th  St.,  New 

York. 
Central  Association  of  Stove  Manufacturers,  Columbus,  Ohio. 
Central  Bureau   of   Dining  Table  Manufacturers,    1215    Monadnock 

Bldg.,  Chicago,  111. 
Central  States  Paper  Trade  Association,  1912  Conway  Bldg.,  Chicago, 

111. 
Central  Supply  Association,  191 5  City  Hall  Square  Bldg.,  Chicago,  III. 
Chamber  of  Mines  and  Oil,  Los  Angeles,  Cal. 
Chemical  Fire  Engine  Exchange,  Cleveland,  Ohio. 
Chicago  Brass   Manufacturers  Association,    1818   City   Hall   Square 

Bldg,  Chicago,  111. 
Chicago  Coal  Merchants  Association,  417  S.  Dearborn  St.,  Chicago,  111. 
Chicago  District  Ice  Association,  76  W.  Monroe  St.,  Chicago,  111. 
Chicago  Electrotypers   Association,   848   Transportation   Bldg.,   Chi- 
cago, 111. 
Chicago  Furniture  Manufacturers  Association,  203  S.  Dearborn  St., 

Chicago,  111. 
Chicago  Stationers  Association,  1047  Conway  Bldg.,  Chicago,  111. 
Children's   Dress  Manufacturers  Association,  200  Fifth   Ave.,  New 

York. 
Cigar  Manufacturers  Association  of  America,  31   Nassau   St.,  New 
York. 


TRADE   ASSOCIATIONS    IN    THE   U.    S.  355 

Circular  Letter  Producers  Association,  949  Broadway,  New  York. 

Clay  Products  Association,  913  Chamber  of  Commerce  Bldg.,  Chicago, 
111. 

Cloak,    Suit   and    Skirt    Manufacturers    Protective   Association,    220 
Fifth  Ave.,  New  York. 

Clothing  Manufacturers  Association  of  New  York,  Inc.,  752  Broad- 
way, New  York. 

Clothing  Manufacturers  Industrial   Exchange,   New   York. 

Coal  Merchants  Association,  90  West  St.,  New  York. 

Coal  Operators  Association,  343  S.  Dearborn  St.,  Chicago,  111. 

Coated  Textile  Manufacturers  Association,  New  York. 

Cocoa  and  Chocolate  Manufacturers  Association  of  the  United  States, 
451  W.  30th  St.,  New  York. 

Coffee  Growers  Association,  73  Front  St.,  New  York. 

Colorado  Stationers  Association,  301  Colorado  National  Bank  Bldg., 
Denver,  Colo. 

Common  Brick  Manufacturing  Association  of  America,  Chicago,  111. 

Compressed  Air  Society,  450  Fourth  Ave.,  New  York. 

Compressed   Gas   Manufacturers  Association,  23   E.   26th    St.,   New 
York. 

Concrete  Mixer  Association,  in  W.  Washington  St.,  Chicago,  111. 

Connecticut  Hardware  Association,  Woodbury,  Conn. 

Container  Club,  Chicago,  111. 

Converters  Association,  35  Nassau  St.,  New  York. 

Cordage  Institute,  52  Broadway,  New  York. 

Corset  Manufacturers  Association  of  the  United  States,  949  Broad- 
way, New  York. 

Cost  Association  of  the  Paper  Industry,  18  E.  41st  St.,  New  York. 

Cotton  Manufacturers   Association  of  South   Carolina,   Spartanburg, 
S.  C. 

Cotton  States  Merchants  Association,  Memphis,  Tenn. 

Cotton  Thread  Manufacturers  Exchange,  116  W.  32nd  St..  New  York. 

Cotton  Yarn  Merchants  Association,  226  Chestnut  St.,  Philadelphia, 
Pa. 

Council  of  Grain  Exchange,  417  Postal  Telegraph  Bldg.,  Chicago,  111. 

Cover  Paper  Manufacturers  Association,  18  E.  41st  St.,  New  York. 

Curtain    Manufacturers   Association   of   America.   373    Fourth   Ave.. 
New  York. 

Cycle  Jobbers  Association  of  America,  Buffalo,  N.  Y. 

Cycle  Parts  and  Accessories  Association,  35  Warren  St.,  New  York. 


356  APPENDIX 


Dairymen's  League,  Inc.,  303  Fifth  Ave.,  New  York. 

Decorative  Glass  Manufacturers  Association,  26  E.  13th  St.,  New 
York. 

Dental  Manufacturers  Club  of  the  United  States,  717  Montrose  Blvd. 
Chicago,  111. 

Domestic  Sugar  Producers  Association,  82  Wall  St.,  New  York. 

Dress  and  Waist  Manufacturers  Association,  200  Fifth  Ave.,  New 
York. 

Dried  Fruit  Association  of  California,  255  California  St.,  San  Fran- 
cisco, Cal. 

Dry  Saturating  Felt  Manufacturers  Association,  233  Broadway,  New 
York. 

E 

Eastern  Association  of  Glass  Distributers,  1475  Broadway,  New  York. 

Eastern  Bar  Iron  Institute,  103  Park  Ave.,  New  York. 

Eastern  Beet  Sugar  Manufacturers  Association,   loio  Union  Trust 

Bldg.,  Detroit,  Mich. 
Eastern  Hollow  Tile  Manufacturers  Association,  175  Fifth  Ave.,  New 

York. 
Eastern  Ice  Manufacturers  Association,  154  Nassau  St.,  New  York. 
Eastern  Millinery  Association,  200  Fifth  Ave.,  New  York. 
Eastern  Paperboard  Manufacturers  Association,  Washington,  D.  C. 
Eastern  Retail  Implement  and  Vehicle  Dealers  Association,  Wood- 
bourne,  Pa. 
Eastern  Shook  and  Wooden  Box  Manufacturers  Association,  40  Court 

St.,  Boston,  Mass. 
Eastern  Soda  Water  Bottlers  Association,  Boston,  Mass. 
Eastern  Soil  Pipe  Association,  269  Clinton  Ave.,  Brooklyn,  N.  Y. 
Eastern  States    Retail    Lumber    Dealers    Association,    New    Haven, 

Conn. 
Eastern  Terra  Cotta  Association,  i  Madison  Ave.,  New  York. 
Eastern  Woodworkers  Cost  Information  Service,  103  Park  Ave.,  New 

York. 
Electric  Hoist  Manufacturing  Association,  52  Broadway,  New  York. 
Electrical  Contractors  Association  of  Chicago,   179  W.  Washington 

St.,  Chicago,  111. 


TRADE   ASSOCIATIONS    IN    THE   U.    S,  357 

Electrical  Credit  Association  of  Chicago,  1350  Marquette  Bldg.,  Chi- 
cago, 111. 

Electrical  Manufacturers  Club,  Hartford,  Conn. 

Electrical  Manufacturing  Industries,  50  Church  St.,  New  York. 

Electrical  Power  Club,  1410  W.  Adams  St.,  Chicago,  111. 

Electrical  Supply  Jobbers  Association,  411  S.  Clinton  St.,  Chicago, 
Jll. 

Electrical  Supply  Jobbers  Association,  52  Broadway,  New  York. 

Elevator  Manufacturers  Association  of  the  United  States,  Chicago,  111. 

Emery  and  Corundum  Importers  and  Manufacturers  Association, 
Philadelphia,  Pa. 

Empire  State  Gas  and  Electrical  Association,  29  W.  39th  St.,  New 
York. 

Empire  State  Paper  Association,  Fred  D.  Morgan  and  Co.,  47  Ex- 
change St.,  Rochester,  N.  Y. 

Enameled  Sanitary  Ware  Manufacturers  Association,  Pittsburgh,  Pa. 

Executive  Association  of  Wholesale  Grocers  of  New  England,  Boston, 
Mass. 

Extension  Table  Bureau,  121 5  Monadnock  Bldg.,  Chicago,  111. 


Farm  Mortgage  Bankers  Association,  112  W.  Adams  St.,  Chicago,  111. 
Federation   of   Mutual   Insurance   Companies,   208   S.   La   Salle   St., 

Chicago,  111. 
Fine  Cotton  Goods  Exchange,  17  Battery  Place,  New  York. 
Fine  Stationery  Manufacturers  Association,  41  Park  Row,  New  York. 
Fire  Clay  Producers  Exchange,  Cleveland,  Ohio. 
Fire  Extinguisher  Exchange,  Cleveland,  Ohio. 
Five  States  Furniture  Dealers  Association,  Parker,  S.  Dak. 
Flavoring  Extract  Manufacturers  Association  of  the  United  States, 

1238  First  National   Bank   Bldg.,   Chicago,  111.,  and  c/o   Baker 

Extract  Co.,  Springfield,  Mass. 
Folding  Box  Manufacturers  National  Association,  8  W.  40th  St.,  New 

York. 
Foreign  Fruit  Association,  202  Franklin  St.,  New  York. 
Foundry  Equipment  Manufacturers  Association,  Cleveland,  Ohio. 
Foundry  Supply    Manufacturers    Association,    120    Broadway,    New 

York. 
Fruit  and  Produce  Trade  Association,  97  Warren  St.,  New  York. 


358  APPENDIX 

Fur  Dressers  and  Fur  Dyers  Association,  Inc.,  43  W.  27th  St.,  New 

York. 
Furniture  Merchants  Club,  35  S.  Dearborn  St.,  Chicago,  111. 


Garment   Manufacturers  Association,  215    S.   Market   St.,   Chicago, 
111. 

Gas  Products  Association,  29  S.  La  Salle  St.,  Chicago,  111. 

General  Contractors  Association,  51  Chambers  St.,  New  York. 

Georgia-Florida  Saw  Mill  Association,  Jacksonville,  Fla. 

Gingham  Association,  320  Broadway,  New  York. 

Glass  Containers  Association  of  America,  Bridgeton,  N.  J. 

Glazed  and  Fancy  Paper  Manufacturers  Association,  ^^2  Duane  St., 

New  York. 
Grain  Dealers  National  Association,  Toledo,  Ohio. 
Granite  Manufacturers  Association,  83^  Main  St.,  Barre,  Vt. 
Granite  Paving  Block  Manufacturers  Association,  13  Park  Row,  New 

York. 
Graphic  Arts  Board  of  Trade,  Inc.,  291  Broadway,  New  York. 
Greeting  Card  Association,  The,  331  Fourth  Ave.,  New  York. 
Grinding  Wheel  Manufacturers  Association  of  the  United  States  and 

Canada,  Dayton,  Ohio. 
Grocery    Bag   Manufacturers    Service    Bureau,   2   Rector    St.,    New 

York. 
Gulf  States  Paper  Association,  c/o  Tennessee  Paper  and  Bag  Co., 

Memphis,  Tenn. 

H 

Handled  Hammer  Bureau,  9  E.  45th  St.,  New  York. 

Hardware  Association  of  the  Carolinas,  Charlotte,  N.  C. 

Hatters  Fur  Cutters  Association  of  the  United  States,  New  York. 

Heating  and  Piping  Contractors  National  Association,  50  Union  Sq., 

New  York. 
Hemlock  Manufacturers  Promotion  Bureau,  Oshkosh,  Wis. 
Hickory  Products  Association,  105  W.  Monroe  St.,  Chicago,  111. 
Hollow    Building   Tile    Association,    1409    Conway    Bldg.,    Chicago, 

111. 
Horn  and  Celluloid  Manufacturers  Association,  Leominster,  Mass. 


TRADE   ASSOCIATIONS    IN    THE   U.    S.  359 


Ice  Publicity  Association,  i8  E.  41st  St.,  New  York. 

Illinois  and  Wisconsin  Retail  Coal  Dealers  Association,  Chicago,  111. 

Illinois  Sand    and    Gravel    Producers    Association,    1406    City    Hall 

Square  Bldg.,  Chicago,  111. 
Independent  Oil  Mens  Association,   no   S.   Dearborn   St.,   Chicago, 

111. 
Independent  Tobacco   Manufacturers   Association   of  United   States, 

Covington,  Ky. 
Insecticide  and  Disinfectant  Manufacturers  Association,  New  York. 
Institute  of  American  Meat  Packers,  Chicago,  111. 
Institute  of  Dry  Color  Manufacturers,  New  York. 
Institute  of  Electrical  Contractors,   103  Park  Ave.,  New  York. 
Institute  of  Lighting  Fixture   Manufacturers,   103   Park  Ave.,   New 

York. 
Institute  of  Lithopone  Manufacturers,  200  Fifth  Ave.,   New  York. 
Institute  of  Makers  of  Explosives,  103  Park  Ave.,  New  York. 
International  Acetylene  Association,  New  York. 
International  Apple  Shippers  Association,  Rochester,  N.   Y. 
International  Association  of  Garment  Manufacturers,  320  Broadway, 

New  York. 
International  Association  Manufacturing  Photo  Engravers,  862  Mon- 

adnock  Bldg.,  Chicago,  111. 
International  Association  of  Master  House  Painters  and  Decorators 

of  the  United  States  and  Canada,  Southern  Bldg.,  Washington, 

D.  C. 
International  Cut   Stone   Contractors   and   Quarrymens   Association, 

Chicago,  111. 
International  Milk  Dealers  Association,  Indianapolis,  Ind. 
International  Monumental    Granite    Producers    Association,    Boston, 

Mass. 
International  Stamp  Manufacturers  Association,   207   Sandusky   St., 

Pittsburgh,  Pa. 
Interstate  Cottonseed  Crushers  Association,  Dallas,  Tex. 
Interstate  Furniture  Dealers  Association,  Chicago,  111. 
Investment  Bankers   Association   of   America,   in    W.   Monroe   St., 

Chicago,  111. 
Iowa-Nebraska     Wholesale     Grocers     Association,     Council     Blufifs, 

Iowa. 


360  APPENDIX 

J 

Jewelry  Craft  Association,  Inc.,  50  E.  42nd  St.,  New  York. 
Jobbers  and  Manufacturers  Association  of  Virginia,  408  Lyric  Bldg., 
Richmond,  \"a. 

K 

Kansas  Book  Dealers  x\ssociation,  327  E.  Douglas  St.,  Wichita,  Kan. 
Knit  Goods  Manufacturers  of  America,  Utica,  N.  Y. 
Knitting  Machine  Manufacturers  Association,  213  Race  St.,  Philadel- 
phia, Pa. 


Label  Manufacturers  National  Association,  8  W.  40th  St.,  New  York. 

Laundryowners  National  Association,  La  Salle.  111. 

Leather  Belting  Exchange,  Philadelphia,  Pa. 

Lime  Association,  The,  Biggs  Bldg.,  Washington,  D.  C. 

Linen  Supply  Association  of  America,  Chicago,  111. 

Linseed  Association,  91  Wall  St.,  New  York. 

Live  Poultry  and  Dairy  Shippers  Traffic  Association,  Chicago,  111. 

Lumber  Carriers  Association  of  the  Great  Lakes,  Detroit,  Mich. 

Lumber  Dealers  Association  of  Connecticut,  P.  O.  Box  1219,  New 

Haven,  Conn. 
Lumber  Manufacturers  Association  of  Southern  New  England,  An- 

sonia,  Conn. 

M 

Magnesia  Association  of  America,  Philadelphia,  Pa. 

Malleable  Iron  Association.  1900  Euclid  Ave.,  Cleveland,  Ohio. 

Maltsters  Bureau  of  Statistics,  326  W.  Madison  St.,  Chicago,  111. 

Manufacturers  Aircraft  Association,  501  Fifth  Ave.,  New  York. 

Manufacturers  Co-operative  Service  of  American  Hardware  Manu- 
facturers Association,  9  E.  45th  St.,  New  York. 

Manufacturers  Textile  Association,  Worcester,  Mass. 

Manufacturing  Chemists  Association,  84  State  St.,  Boston,  Mass. 

Manufacturing  Jewelers  Board  of  Trade,  Turk's  Head  Bldg.,  Provi- 
dence, R.  I. 

Manufacturing  Perfumers  Association  of  the  United  States,  309 
Broadway,  New  York. 


TRADE    ASSOCIATIONS    IN   THE   U.  S.  3^1 

Maple  Flooring  Manufacturing  Association,  Chicago,  111. 

Massachusetts  Ice  Dealers  Association,  335  Ashmont  St.,  Dorchester, 
Mass. 

Massachusetts  Wholesale  Lumber  Association,  Inc.,  70  Kilby  St., 
Boston,  Mass. 

Mens  Belt  Exchange,  116  W.  32nd  St.,  New  York. 

Merchants  Ladies  Garment  Association,  47  W.  34th  St.,  New  York. 

Metal  Finishers  Equipment  Association,  120  Broadway,  New  York. 

Metalware  Club,  280  Madison  Ave.,  New  York. 

Meter  Manufacturers  Exchange,  The,  17  Battery  PL,  New  York. 

Metropolitan  Bag  and  Paper  Jobbers  Association,  66  Broadway,  New 
York. 

Metropolitan  Brass  Founders  Association,  97  Second  Ave.,  Brooklyn, 
N.  Y. 

Metropolitan  Paper  Box  Manufacturers  Association,  150  Nassau  St., 
New  York. 

Middle  States  Shoe  Wholesalers  Association,  127  Duane  St.,  New  York. 

Middle  States  Textile  Manufacturers  Association,  Cannelton,  Ind. 

Middle  States  Wrapping  Paper  Association,  Conway  Bldg.,  Chicago, 
111. 

Mid-West  Dry  Goods  Association,  Indianapolis,  Ind. 

Mid-West  Implement  Dealers  Association,  Council  Blufifs,  Iowa. 

Midwest  Milk  Manufacturers  Association,  no  S.  Dearborn  St.,  Chi- 
cago, 111. 

Mid-West  Rubber  Manufacturers  Association,  332  S.  Michigan  Ave., 
Chicago,  111. 

Millers  National  Federation,  914  Royal  Insurance  Bldg.,  Chicago,  111. 

Millinery  Chamber  of  Commerce,  17  E.  38th  St.,  New  York. 

Millinery  Jobbers  Association,  301  Peoples  Gas  Bldg.,  Chicago,  111. 

Missouri  Valley  Wrapping  Paper  Association,  c/o  Standard  Paper 
and  Woodenware  Co.,  304  W.  6th  St.,  Kansas  City,  Mo. 

Missouri-Kansas  Wholesale  Grocers  Association,  Kansas  City,  Mo. 

Morocco  Manufacturers  National  Association,  1222  North  American 
Bldg.,  Philadelphia,  Pa. 

Motion  Picture  Industry  of  America,  1520  Broadway,  New  York. 

Motor  and  Accessory  Manufacturers  Association,  233  W.  42nd  St., 
New  York. 

Motor  Truck  Association  of  America,  1790  Broadway,  New  York. 

Moulding  and  Picture  Frame  Manufacturers  Credit  Bureau,  Indian- 
apolis, Ind. 


362  APPENDIX 

Mountain  States  Lumber  Dealers  Association,  Denver,  Colo. 
Music  Industries  Chamber  of  Commerce  of  America,  105  W.  40th  St., 

New  York, 
Music  Publishers  Association  of  the  United  States,  243  W.  42nd  St., 

New  York. 
Musical  Supply  Association  of  America,  105  W.  40th  St.,  New  York. 

N 

Naphthalene  Manufacturers  Exchange,  17  Battery  PI.,  New  York. 

National  Agricultural  Limestone  Association,  Columbus,  Ohio. 

National  Alliance  of  Case  Goods  Association,  706  Grand  Rapids 
Savings  Bldg.,  Grand  Rapids,  Mich. 

National  Association  of  Advertising  Specialty  Manufacturers,  955 
Continental  and  Commercial  Bank  Bldg.,  Chicago,  111. 

National  Association  of  Asphalt  Block  Manufacturers,  25  Broad  St., 
New  York. 

National  Association  of  Automobile  Accessory  Jobbers,  1818  City 
Hall  Square  Bldg.,  Chicago,  111. 

National  Association  of  Baby  Vehicle  Manufacturers,  212  Monger 
Bldg.,  Elkhart,  Ind. 

National  Association  of  Bedding  Manufacturers,  831  Monadnock 
Bldg.,  Chicago,  111. 

National  Association  of  Box  Manufacturers,  1553  Conway  Bldg., 
Chicago,  111. 

National  Association  of  Brass  Manufacturers,  139  N.  Clark  St.,  Chi- 
cago, 111. 

National  Association  of  Brokers  in  Refined  Sugar,  124  Front  St., 
New  York. 

National  Association  of  Builders  Exchanges,  Atlanta,  Ga. 

National  Association  of  Building  Owners  and  Managers,  1220  Re- 
public Bldg.,  Chicago,  111. 

National  Association  of  Chair  Manufacturers,  530  Monadnock  Bldg., 
Chicago,  111. 

National  Association  of  Chewing  Gum  Manufacturers,  19  W.  44th 
St.,  New  York. 

National  Association  of  Clothiers,  752  Broadway,  New  York. 

National  Association  of  Collapsible  Tube  Manufacturers,  New  Brigh- 
ton, Pa. 

National  Association  of  Corrugated  Fibre  Box  Manufacturers.  1822 
Republic  Bldg.,  Chicago,  111. 


TRADE   ASSOCIATIONS    IN    THE   U.    S.  S^S 

National    Association    of    Cost    Accountants,    233    Broadway,    New 

York. 
National  Association  of  Cotton  Manufacturers,  Boston,  Mass. 
National  Association  of  Credit  Men,  41  Park  Row,  New  York. 
National  Association  of  Cut  Glass  Manufacturing,  Jermyn,  Pa. 
National  Association  of  Decorative   Arts   and   Industries,    New   Ro- 

chelle,  N.  Y. 
National  Association  of  Dyers  and   Cleaners,   11 18  Fullerton   Bldg., 

St.  Louis,  Mo. 
National  Association  of  Egg  Case  and  Egg  Case  Fillers  Manufac- 
turers, Altamont,  111. 
National  Association  of  Electrical  Contractors  and  Dealers,  no  W. 

40th  St.,  New  York. 
National  Association  of  Employing     Lithographers,     39     State     St., 

Rochester,  N.  Y, 
National  Association  of  Engine  and  Boat  Manufacturers,  29  W.  39th 

St.,  New  York. 
National  Association  of  Finishers  of  Cotton  Fabrics,  320  Broadway, 

New  York. 
National  Association  of  Garment     Manufacturers,     320     Broadway, 

New  York. 
National  Association  of  Glue  and  Gelatin  Manufacturers,  81  Fulton 

St.,  New  York. 
National  Association  of  Greeting   Card   Manufacturers,   331    Fourth 

Ave.,  New  York. 
National  Association  of  Hosiery  and  Underwear  Manufacturers,  425 

Chestnut  St.,  Philadelphia,  Pa. 
National  Association  of  Ice  Cream  Manufacturers,  109  Lafayette  St., 

New  York. 
National  Association  of  Ice  Industries,  18  E.  41st  St.,  New  York. 
National  Association  of  Importers  of  Hides  and  Skins,  41  Park  Row, 

New  York. 
National  Association  of  the  Jewish   Baking  Industry,   51   Chambers 

St.,  New  York. 
National  Association  of  Kitchen  Cabinet  Manufacturers,  Nappanee, 

Ind. 
National    Association    of    Ladies    Hatters,    200    Fifth    Ave.,   New 

York. 
National  Association  of  Leather  Belting  Manufacturing,  P.  O.  Box 

859,  City  Hall  Station,  New  York. 


364  APPENDIX 

National  Association  of  Loose  Leaf  Manufacturers,  1037  Conway 
Bldg.,  Chicago,  111. 

National  Association  of  Macaroni  and  Noodle  Manufacturing  of 
America,  Springfield,  111. 

National  Association  of  Manufacturers  of  Pressed  and  Blown  Glass- 
ware, Pittsburgh,  Pa. 

National  Association  of  Manufacturing  Jewelers,  Providence,  R.  I. 

National  Association  of  Marble  Dealers,  1320  Citizens  Bldg.,  Cleve- 
land, Ohio. 

National  Association  Master  Gravel  and  Slag  Roofers  of  America, 
17  Battery  PI.,  New  York. 

National  Association  of  Men's  Neckwear  Manufacturers,  Inc.,  61 
Broadway,  New  York, 

National  Association  of  Men's  Straw  Hat  Manufacturers  of  Amer- 
ica, 1 182  Broadway,  New  York. 

National  Association  of  Merchant  Tailors  of  America,  9  Hamilton 
PI.,  Boston,  Mass. 

National  Association  of  Motion  Picture  Industry,  Inc.,  1475  Broad- 
way, New  York. 

National  Association  of  Music  Merchants,  105  W.  40th  St.,  New 
York. 

National  Association  of  Office  Appliance  Manufacturers,  233  Broad- 
way, New  York. 

National  Association  of  Ornamental  Iron  and  Bronze  Manufactur- 
ing, Cincinnati,  Ohio. 

National  Association  of  Paint  Jobbers,  140  Van  Buren  St.,  Chicago, 
111. 

National  Association  of  Piano  Bench  and  Stool  Manufacturers,  1315 
Monadnock  Bldg.,  Chicago,  111. 

National  Association  of  Piano  Tuners,  26  E.  Oak  St.,  Chicago,  111. 

National  Association  of  Printing  Ink  Makers,  15  E.  40th  St.,  New 
York. 

National  Association  of  Purchasing  Agents,  25  Beaver  St.,  New 
York. 

National  Association  of  Ready  Cut  House  Manufacturers,  c/o  Gor- 
don-Van Tine  Co.,  Davenport,  la. 

National  Association  of  Real  Estate  Boards,  310  Riggs  Bldg.,  Wash- 
ington, D.  C. 

National  Association  of  Retail  Clothiers,  223  W.  Jackson  Blvd.,  Chi- 
cago, 111. 


TRADE   ASSOCIATIONS    IN    THE    U.    S.  3^5 

National  Association  of  Retail    Druggists,    i68    N.    Michigan    Ave., 

Chicago,  111. 
National  Association  of  Retail  Grocers  of  the  United  States,  Denver, 

Colo. 
National  Association  of  Sand   and    Gravel    Producers,   Indianapolis, 

Ind. 
National  Association  of  Sheet  Metal  Contractors,  261  S.  Fourth  St., 

Philadelphia,  Pa. 
National  Association  of  Sheet    and    Tin    Plate    Manufacturers,    420 

Oliver  Bldg.,  Pittsburgh,  Pa. 
National  Association  of  Sheet  Metal  Products  Manufacturers,   1016 

Commerce  Bldg.,  Minneapolis,  Minn. 
National  Association  of  Sheet  Music   Dealers,  8  E.  34th   St.,   New 

York. 
National  Association  of  Shirt   Manufacturers,   320   Broadway,   New 

York. 
National  Association  of  Stationary  Engineers,  Chicago,  111. 
National  Association  of  Stationers  and  Manufacturers,  41  Park  Row, 

New  York. 
National  Association  of  Steel    and    Copper    Plate    Engravers,    331 

Fourth  Ave.,  New  York. 
National  Association  of  Steel    Furniture   Manufacturers,   911    Scho- 

field  Bldg.,  Cleveland,  Ohio. 
National  Association  of  Stove  Manufacturers,  Troy,  N.  Y. 
National  Association  of  Sweater  and  Knitted  Textile  Manufacturers, 

320  Broadway,  New  York. 
National  Association  of  Talking    Machine    Jobbers,    119    Ninth    St., 

Pittsburgh,  Pa. 
National  Association  of  Upholstered  Furniture  Manufacturers,  1600 

Westminster  Bldg.,  Chicago,  111. 
National  Association  of  Waste  Material  Dealers,  Times  Bldg.,  New 

York. 
National  Association  of  White   Corn    Millers,   Louisville,   Ky. 
National  Association  of  Window    Glass    Manufacturing,    Pittsburgh, 

Pa. 
National  Association  of  Wool    Fibre    Manufacturers,    10    High    St., 

Boston,  Mass. 
National  Association  of  Wool  Manufacturing,  Boston,  Mass. 
National  Association  of  Worsted  and  Woolen  Spinners,  257  Fourth 

Ave.,  New  York. 


366  APPENDIX 

National  Automatic  Sprinkler  Association,  80  Maiden  Lane,  New 
York. 

National  Automobile  Chamber  of  Commerce,  480  Lexington  Ave., 
New  York. 

National  Automobile  Dealers  Association,  603  Rialto  Theatre  Bldg., 
St.  Louis,  Mo. 

National  Basket  and  Fruit  Package  Manufacturers  Association,  171 5 
Merchants  Bank  Bldg.,  Indianapolis,  Ind. 

National  Board  of  Fire  Underwriters,  76  William  St.,  New  York. 

National  Boiler  and  Radiator  Manufacturers  Association,  Geneva, 
N.  Y. 

National  Boot  and  Shoe  Manufacturers  Association,  Granite  Bldg., 
Rochester,  N.  Y. 

National  Bottle  Manufacturers  Association  of  the  United  States  and 
Canada,  120  Broadway,  New  York. 

National  Boys  Blouse  and  Shirt  Manufacturers  Association,  320 
Broadway,  New  York. 

National  Brick  Manufacturers  Association,  211  Hudson  St.,  Indian- 
apolis, Ind. 

National  Broom  Manufacturers  Association,  Chicago,  111. 

National  Builders  Bureau,  Spokane,  Wash. 

National  Builders  Supply  Association,  Indianapolis,  Ind. 

National  Building  Granite  Quarries  Association,  Boston,  Mass. 

National  Bureau  of  Wholesale  Lumber  Distributers,  Washington, 
D.  C. 

National  Canned  Goods  and  Dried  Fruit  Brokers  Association,  326  W. 
Madison  St.,  Chicago,  111. 

National  Canners  Association,  Washington,  D.  C. 

National  Cigar  Leaf  Tobacco  Association,  Lancaster,  Pa. 

National  Cloak,  Suit  and  Skirt  Manufacturers  Association,  1019 
Guardian  Bldg.,  Cleveland,  Ohio. 

National  Coal  Association,  707  Southern  Bldg.,  Washington,  D.   C. 

National  Coal  Jobbers  Association,  Old  Colony  Club,  Chicago,  111. 

National  Coffee  Roasters  Association,  74  Wall  St.,  New  York. 

National  Commercial  Fixture  Manufacturers  Association,  517  Mur- 
ray Bldg.,  Grand  Rapids,  Mich. 

National  Committee  of  the  Confederated  Supply  Association,  New 
York. 

National  Confectioners  Association  of  the  United  States,  1921  Con- 
way Bldg.,  Chicago,  111. 


TRADE   ASSOCIATIONS    IN    THE   U.    S.  36? 

National  Contractors  Association,  103  Park  Ave.,  New  York. 
National  Council  of  American  Cotton  Manufacturers,  320  Broadway, 

New  York. 
National  Council  of  Furniture  Association,  Chicago,  111. 
National  Council  of  Insurance  Federations,  no  Fort  St.  W.,  Detroit, 

Mich. 
National  Crushed  Stone  Association,  405  Hartman  Bldg.,  Columbus, 

Ohio. 
National  Dairy  Council,  Chicago,  111. 
National  Dairy  Union,  Catawissa,  Pa. 
National  District  Heating  Association,  Greenville,  Ohio. 
National  Drug  Trade  Conference,  Detroit,  Mich. 
National  Electric  Light  Association,  29  W.  39th  St.,  New  York. 
National  Erectors  Association,  286  Fifth  Ave.,  New  York. 
National  Federation  of  Box    Manufacturers   Associations,    Philadel- 
phia, Pa. 
National  Federation  of  Construction  Industries,  Philadelphia,  Pa. 
National  Federation  of  Implement  and  Vehicle  Dealers  Association, 

Abilene,  Kan. 
National  Fertilizer  Association,  loio  Arch  St.,  Philadelphia,  Pa. 
National  Founders  Association,  29  S.  La  Salle  St.,  Chicago,  111. 
National    Garment    Retailers    Association,    47    W.    34th    St.,    New 

York. 
National  Gas  Appliance    Manufacturers   Exchange,    17   Battery    PL, 

New  York. 
National  Gas  Engine  Association,   1456  Monadnock  Bldg.,   Chicago, 

111. 
National  Ginners  Association,  Memphis,  Tenn. 
National  Glass  Distributers  Association,  in  W.  Monroe  St.,  Chicago, 

111. 
National  Handling    Machinery    Manufacturers    Association,    35    W. 

39th  St.,  New  York. 
National  Hardware  Association  of  the  United  States,  Philadelphia, 

Pa. 
National  Hardwood    Lumber    Association,    1864    McCormick    Bldg., 

Chicago,  111. 
National  Harness  Manufacturers  Association,  Cincinnati,  Ohio. 
National  Hay  Association,  Winchester,  Ind. 

National  Implement  and  Vehicle  Association,  72  W.  Adams  St.,  Chi- 
cago, 111. 


368  APPENDIX 

National  Jewelers  Board  of  Trade,  15  Maiden  Lane,  New  York. 
National  Ladder   Manufacturers   Association,    iii    W.    Monroe    St., 

Chicago,  111. 
National  League  of  Commission  Merchants,  90  West  Broadway,  New 

York. 
National  Leather  and  Shoe  Finders  Association,  817  Wright  Bldg., 

St.  Louis,  Mo. 
National  Lumber  Exporters  Association,  Baltimore,  Md. 
National  Lumber  Manufacturers  Association,  925  Lumber  Exchange 

Bldg.,  Chicago,  111. 
National  Machine  Tool  Builders  Association,  Worcester,  Mass. 
National  Manufacturers  of  Soda  Water  Flavors,  1238  First  National 

Bank  Bldg.,  Chicago,  111. 
National  Marine  League  of  the  United  States,  268  Pearl  St.,  New 

York. 
National  Metal  Trades  Association,  1021  Peoples  Gas  Bldg.,  Chicago, 

111. 
National  Millinery  Association,  1237  Broadway,  New  York. 
National  Mineral  Water  and  Beverage  Association,  New  York. 
National  Music  Roll  Manufacturers  Association,  57  E.  Jackson  Blvd., 

Chicago,  111. 
National  Musical  Merchandise  Association  of  the  United  States,  54-82 

Broadway,  Brooklyn,  N.  Y. 
National  Onion  Association,  Kenton,  Ohio. 

National  Ornamental  Glass  Manufacturers  Association,  2700  St.  Vin- 
cent St.,  St.  Louis,  Mo. 
National  Outdoor  Furniture  Manufacturers  Association,  Greensburg, 

Pa. 
National  Paint,  Oil  and  Varnish  Association,  100  William  St.,  New 

York. 
National  Paper  Box  Manufacturers  Association,  112  N.  Broad  St., 

Philadelphia,  Pa. 
National  Paper  Trade  Association  of   the  United   States,  41    Park 

Row,  New  York. 
National  Paving  Brick  Manufacturers  Association,  830  B.  of  L.  E. 

Bldg.,  Cleveland,  Ohio. 
National  Perfumery   Manufacturers   Association,   68   Hunters   Point 

Ave.,  Long  Island  City.,  N.  Y. 
National  Petroleum  Association,  823  The  Guardian  Bldg.,  Cleveland, 

Ohio. 


TRADE   ASSOCIATIONS    IN    THE   U.    S.  3^9 

National  Piano  Manufacturers  Association  of  America,  494  Boylston 
St.,  Boston,  Mass. 

National  Piano  Travelers  Association,  136th  St.  and  Willow  Ave., 
New  York. 

National  Pickle  Packers  Association,  326  W.  Madison  St.,  Chicago, 
111. 

National  Pipe  and  Supplies  Association,  909  Oliver  Bldg.,  Pittsburgh, 
Pa. 

National  Poultry,  Butter  and  Egg  Association,  Chicago,  111. 

National  Preservers  and  Fruit  Products  Association,  Baltimore,  Md. 

National  Railway  Appliances  Association,  Chicago,  111. 

National  Refrigerator  Manufacturers  Association,  1938  Farwell  Ave., 
Chicago,  111. 

National  Refrigerator  Manufacturers  Association,  Box  745,  Kalama- 
zoo, Mich. 

National  Retail  Coal  Merchants  Association,  436  Widener  Bldg., 
Philadelphia,  Pa. 

National  Retail  Dry  Goods  Association,  200  Fifth  Ave.,  New  York. 

National  Retail  Hardware  Association,  Argos,  Ind. 

National  Retail  Liquor  Dealers  Association  of  the  United  States  of 
America,  Chicago,  111. 

National  Retail  Lumber  Dealers  Association,  923  Dime  Bank  Bldg., 
Detroit,  Mich. 

National  Retail  Monument  Dealers  Association  of  America,  Lafay- 
ette, Ind. 

National  Retail  Toy  Buyers  Association,  200  Fifth  Ave.,  New  York. 

National  Saddlery  Manufacturing  Association,  Chicago,  111. 

National  School  Supply  Association,  Steinway  Hall  Bldg.,  Chicago, 
111. 

National  Shoe  Retailers  Association  of  the  United  States  of  America, 
Danville,  111. 

National  Shoe  Wholesalers  Association  of  the  United  States  of 
America,  209  S.  La  Salle  St.,  Chicago,  111. 

National  Slag  Association,  Cleveland,  Ohio. 

National  Supply  and  Machinery  Dealers  Association,  Philadelphia,  Pa. 

National  Tent  and  Awning  Manufacturers,  344  Endicott  Bldg.,  Min- 
neapolis, Minn. 

National  Terra  Cotta   Society,   i   Madison  Ave.,  New  York. 

National  Varnish  Manufacturers  Association,  636  The  Bourse,  Phila- 
delphia, Pa. 


370  APPENDIX 

National  Veneer  and  Panel  Manufacturers  Association,  171 5  Mer- 
chants Bank  Bldg.,  Indianapolis,  Ind. 

National  Warm  Air  Heating  and  Ventilating  Association,  Columbus, 
Ohio. 

National  Wholesale  Druggists  Association,  99  Nassau  St.,  New 
York. 

National  Wholesale  Dry  Goods  Association,  505  Arch  St.,  Philadel- 
phia, Pa. 

National  Wholesale  Floor  Covering  Association,  Philadelphia,  Pa. 

National  Wholesale  Grocers  Association,  6  Harrison  St.,  New  York. 

National  Wholesale  Jewelers  Association,  Philadelphia,  Pa. 

National  Wholesale  Lumber  Dealers  Association,  66  Broadway,  New 
York. 

National  Wholesale  Mens  Furnishings  Association,  200  Fifth  Ave., 
New  York. 

National  Wholesale  Tailors  Association,  Chicago,  111. 

National  Womens  Association  of  Commerce,  Chicago,  111. 

National  Wood  Chemical  Association,  Bradford,  Pa. 

National  Wool  Growers  Association,  Salt  Lake  City,  Utah. 

National  Woolens  and  Trimmings  Association,  13  Astor  PI.,  New 
York. 

Natural  Gas  Association  of  America,  Oliver  Bldg.,  Pittsburgh,  Pa. 

Natural  Ice  Association  of  America,  18  E.  41st  St.,  New  York. 

Natural  Plant,  Flower  and  Fruit  Guild,  70  Fifth  Ave.,  New  York. 

Nebraska  Manufacturers  Association,  Orpheum  Theatre  Bldg.,  Lin- 
coln, Neb. 

New  England  Association  of  Boiler  Manufacturers,  East  Boston, 
Mass. 

New  England  Association  of  Dyers   and   Cleaners,    Boston,   Mass. 

New  England  Business  Paper  Association,  Boston,  Mass. 

New  England  Coal  Dealers  Association,  Boston,  Mass. 

New  England  Dry  Goods  Association,  Boston,  Mass. 

New  England  Hardware  Dealers  Association,  176  Federal  St.,  Bos- 
ton, Mass. 

New  England  Implement  Dealers  Association,  Natick,  Mass. 

New  England  Iron  and  Hardware  Association,  Boston,  Mass. 

New  England  Jewelers  Board  of  Trade,  Boston,  Mass. 

New  England-  Lace  Manufacturers  Association,  Providence,  R.  I. 

New  England  Manufacturing  Confectioners  Association,  Boston, 
Mass. 


TRADE   ASSOCIATIONS    IN   THE   U.    S.  37 ^ 

New  England  Manufacturing  Jewelers  and  Silversmiths  Association, 

Providence,  R.  I. 
New  England  Paper  Merchants  Association,  Boston,  Mass. 
New  England  Shoe  and  Leather  Association,  i66  Essex  St.,  Boston, 

Mass. 
New  England  Shoe  Wholesalers  Association,  Boston,  Mass. 
New  England  Stove  Manufacturing  Association,  Boston,  Mass. 
New  England  Yellow  Pine  Dealers  Association,  Providence,  R.  I. 
New  Hampshire  Manufacturers  Association.  83  Hanover  St.,  Man- 
chester, N.  H. 
News-Print  Service  Bureau,  18  E.  41st  St.,  New  York. 
New  York  Boat  Owners  Association,  80  Broad  St.,  New  York. 
New  York  Lumber  Trade  Association,  The,  18  Broadway,  New  York. 
New  York  State  Bankers  Association,  128  Broadway,  New  York. 
New  York  State  Retail    Grocers    Association,    164    Bush    St.,    New 

York. 
New  York  State  Ice    Manufacturers    Association,    154    Nassau    St., 

New  York. 
New  York  Wholesale    Grocers    Association,    6    Harrison    St.,    New 

York. 
North  Carolina  Pine  Association,  Norfolk,  Va. 
North  Carolina  Pine  Box    and    Shook    Manufacturers    Association, 

Emporia,  Va. 
Northern  Hemlock  and  Hardwood  Manufacturers  Association,  Osh- 

kosh.  Wis. 
Northern  Pine  Manufacturers  Association,  Minneapolis,  Minn. 
Northern  Potato  Traffic  Association,  Minneapolis,  Minn. 
Northern  White  Cedar  Association,  Minneapolis,  Minn. 
Northwest  Clay  Association,  Minneapolis,  Minn. 
Northwest  Face  Brick  Association,  Minneapolis,  Minn. 
Northwest  Retail  Furniture  Dealers  Association,   Portland,  Ore. 
Northwest  Tractor  Trade  Association,  Minneapolis,  Minn. 
Northwestern  Fruit  Jobbers  Association,  Minneapolis,  Minn. 
Northwestern  Hardwood   Lumbermens   Association,   Minneapolis, 

Minn. 
Northwestern  Lumbermens  Association,  Minneapolis,  Minn. 
Northwestern  Paper  Merchants  Association,   Minneapolis,   Minn. 
Northwestern  Photo  Engravers  Association,  Portland.  Ore. 
Northwestern  Stationers  Association,   379   Minnesota   St.,   St.    Paul, 

Minn. 


372  APPENDIX 


Oak  Flooring  Manufacturers  Association,  Chicago,  111. 

Ocean  Pearl  Button  Manufacturing  Association,  Philadelphia,  Pa. 

Olive  Association,  129  Charlton  St.,  New  York. 

Omaha  Stationers  Association,  c/o  Omaha  Printing  Co.,  13th  and  Far- 
nam  Sts.,  Omaha,  Neb. 

Optical  Manufacturers  Association,  511  Westminster  St.,  Providence, 
R.  I. 

Organ  Builders  Association  of  America,  112  Burrell  St.,  Milwaukee, 
Wis. 

Ostrich  Feather  Manufacturers  Association  of  America,  200  Fifth 
Ave.,  New  York. 

Outdoor  Advertising  Association,  Chicago,  111. 

Oyster  Growers  and  Dealers  Association  of  North  America,  Wash- 
ington, D.  C. 


Pacific  Coast  Paper  Box  Manufacturers  Association,  c/o  Independ- 
ent Paper  Box  Co.,  Oakland,  Cal. 

Pacific  Northwest  Milk  Dealers  Association,  Seattle,  Wash. 

Pacific  Northwestern  Stationers  Association,  Seattle,  Wash. 

Pacific  States  Paper  Trade  Association,  461  Market  St.,  San  Fran- 
cisco, Cal. 

Padlock  Manufacturers  Service  Bureau,  2  Rector  St.,  New  York. 

Paint  Manufacturing  Association  of  the  United  States,  Philadelphia, 
Pa. 

Paint  and  Oil  Club  of  New  England,  Boston,  Mass. 

Paper  Association  of  New  York  City,  c/o  Henry  Lindenmeyr  Sons, 
32  Bleecker   St.,  New  York. 

Paper  Trade  Association  of  Philadelphia,  Philadelphia,  Pa. 

Paper  Trade  Conference,  461  Market  St.,  San  Francisco,  Cal. 

Parquet  Flooring  Association,  16  W.  47th  St.,  New  York. 

Pennsylvania  and  Atlantic  Seaboard  Hardware  Association,  Pitts- 
burgh, Pa. 

Pennsylvania,  New  Jersey  and  Delaware  Wholesale  Grocers  Associa- 
tion, Philadelphia,  Pa. 

Perfume  Importers  Association,  25  W.  32nd  St.,  New  York. 

Periodical  Publishers  Association  of  America,  200  Fifth  Ave.,  New 
York. 


TRADE   ASSOCIATIONS    IN    THE   U.    S.  373 

Philadelphia  Paper   Stock  Dealers  Association,  30   S.   Marshall   St., 

Philadelphia,  Pa. 
Philadelphia  Stationers  Association,  607  Chestnut  St.,  Philadelphia, 

Pa. 
Photographers  Association  of  America,  Cleveland,  Ohio. 
Pipe  Fittings  and  Valve  Exchange,  17  Battery  PI.,  New  York. 
Pittsburgh  Stationers  Club,  The,  c/o  The  Myers  and  Shinkle  Co.,  633 

Liberty  Ave.,  Pittsburgh,  Pa. 
Plate  Glass  Manufacturers  of  America,  Pittsburgh,  Pa. 
Plumbago-Graphite  Association,  17  State  St.,  New  York. 
Portland  Cement  Association,  in  W.  Washington  St.,  Chicago,  111. 
Poster  Advertising  Association  Inc.,  1620  Steger  Bldg.,  Chicago,  111. 
Potato  Association  of  America,  Minneapolis,  Minn. 
Prepared  Roofing  and  Shingle  Manufacturing  Association,  Chicago, 

111. 
Pressed  Metal  Association,  Cleveland,  Ohio. 
Printing   Press    Manufacturers   Association,    150    Nassau    St.,    New 

York. 
Private  Bankers  Association  of  the  State  of  New  York,  60  Broadway, 

New  York. 
Proprietary  Association  of  America,  Syracuse,  N.  Y. 
Puget  Sound  Salmon  Canners  Association,  Seattle,  Wash. 
Pulp  Manufacturers  Association,  18  E.  41st  St.,  New  York. 


Railway  Business  Association,  30  Church  St.,  New  York. 
Railway  Car  Manufacturers  Association,  61  Broadway,  New  York. 
Railway  Supply  Manufacturers  Association,  Pittsburgh,  Pa. 
Railway  Telegraph  and  Telephone  Appliance  Association,  30  Church 

St.,  New  York. 
Range  Boiler  Exchange,  17  Battery  PI.,  New  York. 
Raw  Ostrich  Feather  Importers  Association,  31  Union  St.,  New  York. 
Refractories  Manufacturers  Association,  840  Oliver  Bldg.,  Pittsburgh, 

Pa. 
Refrigerating     Machinery     jNIanufacturers     Association,     Cincinnati, 

Ohio. 
Refrigerator  Manufacturers  Association,  1135  Broadway,  New  York. 
Retail  Bakers  Association  of  the  Eastern  States,  1404  Decatur  St., 

Brooklyn,  N.  Y. 


374  APPENDIX 

Retail  Booksellers    and    Stationers    Association    of    Illinois,    323    S. 

Wabash  Ave.,  Chicago,  111. 
Retail  Booksellers  and  Stationers  Association  of  Ohio,  c/o  University 

Book  Store,  Delaware,  Ohio. 
Retail  Furriers  Association  of  America,  Inc.,  5  Beekman  St.,  New 

York. 
Retail  Millinery  Association  of  America,  1270  Broadway,  New  York. 
Rice  Dealers  of  the  World  Association,  New  York. 
Rice  Millers  Association,  Beaumont,  Tex. 
Rolling  Steel  Door  Association,  103  Park  Ave.,  New  York. 
Rope  Paper  Sack  Bureau,  Boston,  Mass. 
Rubber  Association  of  America,  Inc.,  The,  52  Vanderbilt  Ave.,  New 

York. 


St.  Louis  Stationers  Association,  Central  National  Bank  Bldg.,   St. 

Louis,  Mo. 
Sales  Book  Manufacturers  Association,  986  Continental  and  Commer- 
cial Bank  Bldg.,  Chicago,  111. 
Salesmens  Association  of  the  Paper  Industry,   18  E.  41st  St.,  New 

York. 
Salt  Producers  Association,  Detroit,  Mich. 

Sandpaper  Association  of  the  United  States,  61  Broadway,  New  York. 
Sanitary   Potters   Association,   American    Mechanic   Bldg.,   Trenton, 

N.J. 
Savings  Bank  Association  of  the  State  of  New  York,  56  W.  45th  St., 

New  York. 
Scale  and  Balance  Manufacturers  Association,  1253  Broadway,  New 

York. 
Sewing    Machine    Manufacturers    Association,    c/o    Davis    Sewing 

Machine  Co.,  Dayton,  Ohio. 
Sheet  Metal  Club,  Philadelphia,  Pa. 

Sheet  Metal  Ware  Association,  280  Madison  Ave.,  New  York. 
Shipowners  Association  of  the  Pacific  Coast,  San  Francisco,  Cal. 
Shoe  Lace  Manufacturers  Exchange,  Providence,  R.  I. 
Shoe  Polish  Manufacturers  Association  of  America,  The,  Charleston, 

W.  Va. 
Silk  Association  of  America,  The,  354  Fourth  Ave.,  New  York. 
Silk  Dyers  Mutual  Protective  Association  of  America,  Paterson,  N.  J. 


TRADE   ASSOCIATIONS    IN    THE   U.    S.  375 

Solder  and  Bearing  Metal  Manufacturers  Association,  233  Broadway, 

New  York. 
Southeastern  Box  Manufacturers  Association,  Atlanta,  Ga. 
Southeastern  Hardware  and  Implement  Association,  Atlanta,  Ga. 
Southeastern  Millers  Association,  Nashville,  Tenn. 
Southeastern  Wrapping  Paper  Association,  c/o  Tennessee  Paper  and 
Bag  Co.,  Memphis,  Tenn. 

Southern  Appalachian  Coal  Operators  Association,  Knoxville,  Tenn. 

Southern  Cypress   Manufacturing  Association,   1206  Perditto   Bldg., 
New  Orleans,  La. 

Southern  Furniture  Manufacturing  Association,  High  Point,  N.  C. 

Southern  Hardware  Jobbers  Association,  P.  O.  Box  654,  Richmond, 
Va. 

Southern  Hardwood  Traffic  Association,  Memphis,  Tenn. 

Southern  Ice  Exchange,  Selma,  Ala. 

Southern  Kaolin  Miners  Association,  Macon,  Ga. 

Southern  Logging  Association,  New  Orleans,  La. 

Southern  Metal  Trades  Association,  Atlanta,  Ga. 

Southern  Pine  Association,  Interstate  Bank  Bldg.,  New  Orleans,  La. 

Southern  Retail  Furniture  Association,  Charlottesville,  Va. 

Southern  Sash,  Door  and  Millwork  Manufacturers  Association,  1003 
Chandler  Bldg.,  Atlanta,  Ga. 

Southern  Shoe  Wholesalers  Association,  Charleston,  S.   C. 

Southern  Spinners  Association,  York,  S.  C. 

Southern  Supply  and  Machinery  Dealers  Association,  Richmond,  Va. 

Southern  Wholesale  Dry  Goods  Association,  Richmond,  Va. 

Southern  Wholesale  Grocers  Association,  Jacksonville,  Fla. 

Southwestern  Electrical  and  Gas  Association,  Dallas,  Tex. 

Southwestern  Ice  Manufacturers  Association,  Temple,  Tex. 

Southwestern  Interstate    Coal    Operators    Association,    Kansas.  City, 
Mo.  •  i 

Southwestern  Lumbermens  Association,  501  Long  Bldg.,  Kansas  City, 
Mo. 

Southwestern  Millers  League.  Kansas  City,  ]\Io. 

Spruce  Bureau,  North  Portland,  Ore. 

State  Undertakers  Association,  78  Greenwich  St.,  New  York. 

Stationers  Association  of  California,  255  California   St.,  San  Fran- 
cisco, Cal. 

Stationers  and  Publishers  Board  of  Trade,  97  Nassau  St.,  New  York. 

Stationers  Association  of  Essex  County,  927  Broad  St.,  Newark,  N.  J. 


376  APPENDIX 

Stationers  Association  of  New  Orleans,  403  Weis  Bldg.,  New  Or- 
leans, La. 

Stationers  Association  of  Southern  California,  608  Johnson  Bldg., 
Los  Angeles,  Cal. 

Stationers  Club  of  Columbus,  c/o  Diehl  Office  Equipment  Co.,  Co- 
lumbus, Ohio. 

Stationers  Club  of  Indianapolis,  44  S.  Penn.   St.,  Indianapolis,  Ind. 

Stationers  Club  of  Toledo,  827  Nicholas  Bldg.,  Toledo,  Ohio. 

Steel  Barrel  Manufacturers  Association,  Detroit,  Mich. 

Steel  Fabricators  of  the  United  States,  50  Church  St.,  New  York. 

Steel  Sash  Manufacturers  Exchange,  17  Battery  PL,  New  York. 

Sterling  Silver-Ware  Manufacturers  Association,  15  Maiden  Lane, 
New  York. 

Stoker  Manufacturers  Association,  25  Foster  St.,  Worcester,  Mass. 

Store  Equipment  Manufacturers  Association,  233  Broadway,  New 
York. 

Structural  Steel  Society,  Chicago,  111. 

Suspenders  Manufacturers  Exchange,  116  W.  32nd  St.,  New  York. 

Sweater  and  Knitted  Textile  Manufacturers  Association,  320  Broad- 
way, New  York. 


Tanners  Council  of  the  U.  S.  A.,  41  Park  Row,  New  York. 
Tea  Association  of  the  United  States,  106  Water  St.,  New  York. 
Technical  Association  of  the  Pulp  and  Paper  Industry,  542  Fifth  Ave., 

New  York. 
Texas  Hardware  Jobbers  Association,  320  Broadway,  New  York. 
Textile  Alliance,  45  E.  17th  St.,  New  York. 
Textile   Color  Card  Association   of   the  United   States,  315   Fourth 

Ave.,  New  York. 
Tile  and  Mantel  Contractors  Association  of  America,  Cincinnati,  Ohio. 
Tile  Manufacturers  Credit  Association,  i  Reeves  Bldg.,  Beaver  Falls, 

Pa. 
Tin  Importers  Association,  Inc.,  50  Broad  St.,  New  York. 
Tissue  Paper  Manufacturers  Association,  18  E.  41st  St.,  New  York. 
Tobacco  Association  of  the  United  States,  Winston-Salem,  N.  C. 
Tobacco  Merchants  Association  of  the  United  States,  5  Beekman  St., 

New  York. 
Toilet  Paper  Converters  Association,  18  E.  41st  St.,  New  York. 
Tool  Steel  Society,  116  W.  32nd  St.,  New  York. 


TRADE    ASSOCIATIONS    IN    THE    U.    S.  377 

Toy  Manufacturers  of  the  United  States  of  America,  949  Broadway, 
New  York. 

Trailer  Manufacturers  of  America,  no  W.  40th  St.,  New  York. 

Tri-State  Country  Grain  Shippers  Association,  Minneapolis,  Minn. 

Tri-State  Packers  Association,  Princess  Anne,  Md. 

Tubular  Plumbing  Goods  and  Tank  Trimming  Manufacturers  Asso- 
ciation, New  York. 

Tumblar  Plumbing  Goods  and  Tank  Fittings  Exchange,  17  Battery 
PL,  New  York. 

Turned  Ware  Association,  422  Murray  Bldg.,  Grand  Rapids,  Mich. 

Turpentine  and  Rosin  Producers  Association,  New  Orleans,  La. 

Typothetae  of  Buffalo,  520  White  Bldg.,  Buffalo,  N.  Y. 

U 

Umbrella   Manufacturers  Association  of  America,   10  W.   23rd   St., 

New  York. 
Union  Association  of  Lumber  and  Sash  and  Door  Salesmen,  Toledo, 

Ohio. 
United  Metal  Trades  Association  of  the  Pacific  Coast,  Portland,  Ore. 
United  States  Alkali   Export  Association,   171    Madison   Ave.,   New 

York. 
United  States  Brewers  Association,  50  Union  Sq.,  New  York. 
United  States  Dyestuff   and   Chemical    Importers   Association,    New 

York. 
United  States  Gold  Leaf  Manufacturers  Association,  Brooklyn,  N.  Y. 
United  States  Manufacturers  Association   of   Ladies  and   Childrens 

Hats,  621  Broadway,  New  York. 
United  States  Potash  Producers  Association,  Washington,  D.  C. 
United  States  Potters  Association,  East  Liverpool,  Ohio. 
United  States  Shellac    Importers   Association,    175    Pearl    St.,    New 

York. 
United  States  Sugar  Manufacturing  Association,  Washington,  D.  C. 
United  Typothetae  and  Franklin  Clubs  of  America,  550  Transporta- 
tion Bldg.,  Chicago,  111. 
United  Upholstery  Manufacturers  Association,  Philadelphia,  Pa. 
United  Waist  League  of  America,  29  E.  32nd  St.,  New  York. 
Upholstery  Association  of  America,  906  Broadway,  New  York. 
Utah-Idaho  Grain  Exchange,  Salt  Lake  City,  Utah. 
Utah-Idaho  Wholesale  Grocers  Association,  Salt  Lake  City,  Utah. 


378  APPENDIX 


Vegetable    Parchment   Manufacturers   Association,    505   Fifth   Ave., 

New  York. 
Vehicle  League,  Charlotte,  N.  C. 
Vehicle  Manufacturers  Association  of  Chicago,  117  N.  Dearborn  St., 

Chicago,  111. 
Vitrified  Pipe  Manufacturing  Association,  Irondale,  Ohio. 

W 

Wall  Paper  Manufacturers  Association  of  the  United  States,  1328 
Broadway,  New  York. 

Waterproof  Wrapping  Paper  Manufacturers  Association,  Niagara 
Falls,  New  York. 

Waxed  Paper  Manufacturers  Association,  505  Fifth  Avenue,  New 
York. 

Webbing  Manufacturers  Exchange,  17  Battery  PI.,  New  York. 

West  Coast  Lumbermens  Association,  Seattle,  Wash. 

Western  Association  of  Retail  Cigar  Dealers,  Seattle,  Wash. 

Western  Association  of  Rolled  Steel  Consumers,  Chicago,  III. 

Western  Association  of  Shoe  Wholesalers,  Chicago,  III. 

Western  Canners  Association,  Chillicothe,  Ohio. 

Western  Coal  Producers  Association,  Billings,  Mont. 

Western  Fruit  Jobbers  Association  of  America,  Denver,  Colo. 

Western  Grain  Dealers  Association,  Des  Moines,  Iowa. 

Western  Ice  Manufacturers  Association,  Kansas  City,  Mo. 

Western  Leaf  Tobacco  Merchants  Credit  Association,  Milwaukee, 
Wis. 

Western  Magnesite  Association,  San  Francisco,  Cal. 

Western  Paper  Box  Manufacturers  Association,  Des  Moines,  Iowa. 

Western  Paper  Merchants  Association,  c/o  Midland  Paper  Co.,  Chi- 
cago, 111. 

Western  Paving  Brick  Manufacturing  Association,  Kansas  City,  Mo. 

Western  Petroleum  Refiners  Association,  Kansas  City,  Mo. 

Western  Pine  Manufacturers  Association,  Portland,  Ore. 

Western  Red  Cedar  Association,  Spokane,  Wash. 

Western  Retail  Implement,  Vehicle  and  Hardware  Association, 
Abilene,  Kan. 

Western  Retail  Lumbermens  Association,  Spokane,  Wash. 


TRADE    ASSOCIATIONS    IN    THE    U.    S.  379 

White  Cedar  Shingle  Manufacturing  Association,  Oshkosh,  Wis. 

White  Pine  Bureau,  St.  Paul,  Minn. 

Wholesale  Coal  Trade  Association  of  New  York,  i   Broadway,  New 

York. 
Wholesale  Saddlery  Association  of  the  United  States,  30  N.  La  Salle, 

St.,  Chicago,  111. 
Wholesale  Sash  and  Door  Association,  1210  Steger  Bldg.,  Chicago, 

111. 
Wholesale  Shoe  League,  The,  127  Duane  St.,  New  York. 
Wholesale  Stationers    Association   of   the   United    States,    Brooklyn, 

N.  Y. 
Wisconsin  Paper  Merchants  Association,  Racine,  Wis. 
Womens  Wear  Manufacturers  Association,  31  Union  Sq.,  New  York. 
Wool  Stock  Graders  Association,  200  Fifth  Ave.,  New  York. 
Woolen  and  Dress  Goods  Merchants  Association,  31  Union  Sq.,  New 

York. 
Wrapping  Paper  Manufacturers  Service  Bureau,  2  Rectot  St.,  New 

York. 
Writing  Paper  Manufacturers  Association,  18  E.  41st  St.,  New  York. 
Writing  Tablet  Manufacturers  Association,  41  Park  Row,  New  York. 


INDEX 


Accounts,  232 

Active  membership,  59 

assessments,  64 
Addresses     (See  "Speeches") 
Adjournment,  86 
Advantages, 
to  consumer,  6 
to  industry,  4 
Advertising, 
bureau,  in 

dishonest,  elimination,  7,  103,  109 
function  of  trade  association,  103- 

112 
funds,  108 
indirect,  106 
motion  pictures,  107 
Affiliated  associations,  42 

assessments,  64 
Affiliated  membership,  59 
Amalgamation,  associations,  37 
American    Iron   and   Steel   Institute 
Bureau  of  Industrial  Relations, 
122 
American  Paper  and  Pulp  Associa- 
tion, 23,  43 
conservation  of  materials,  1 1 5 
membership,  60 
list,  346 
American  Paper  Exports,  Inc., 
organization,  175 
packing  instructions,  175 
American  Tobacco  Company  v.  U.S., 

decision,  303,  332-334 
American  Trade  Association  Execu- 
tives, "some  ways  to  kill  an  as- 
sociation," 93 


Annual  reports,  276 

secretary,  87 
Antitrust    laws     (See    also     "Legal 
cases    affecting    trade    associa- 
tions") 

Clayton  Anti-Trust  Act,  309 

Federal  Anti-Trust  Act,  1 890,  20 

Federal    Trade    Commission    Bill, 
309 

Sherman  Anti-Trust  Act,  20,  299 
Applications     (See  also   "Election," 
"Membership") 

membership,  60 

undesirable,  61 
Arbitration  board,  148 
Assessments,  63 

active  membership,  64 

affiliated  associations,  64 

associate  membership,  64 

basis,  63 

bills,  when  rendered,  64 

collection,  231 
Associate  membership,  59 

assessments,  64 

election,  61 
Associations, 

advantages, 
to  industry,  4 
to  consumer,  6 

affiliated,  42 

amalgamation,  37 

branch,  162-181 

by-laws,  72-75 

definition,  3 

development,  7-13,  23 

history,  14-24 

incorporation,  46 


381 


382 


INDEX 


Associations — (Continued) 

interstate,  44 

local,  44 

organization,  47-62 

types,  37-46 
Attendance,  90 

Automobile  Dealers  Association,  ad- 
vertising, 106 


B 


Banquets,  annual,  91 
Bibliography,  321-326 
Bids, 

exchange  of,  287 
records,  288 
Bills,  when  rendered,  64 
Black  list.    Eastern    States    Lumber 

Association,   2 1 
Boards  of  trade     (See  "Commercial 

associations") 
Bonds, 

given  by  members,  68 
given  by  treasurer,  70 
Branch  associations,  162-181 
cost  associations,  162-166 
export,  175 
purchasing,  169 

relation  to  trade  association,  179 
salesmen's,  166 
superintendents',  179 
technical,  180 
Bucks  Stove  and  Range  Company  v. 
Gompers,  decision,  304,  336-338 
Budget,  65 

sample,  66 
Bulletins,  129,  275 

Silk  Association  of  America,  113 
Bureaus, 

advertis'ng,  iii 
credit,  136 
employment,  135 
purchasing,  169 
trade-mark,  129 
trafl&c,  134 


Business, 
conditions, 

knowledge,  value,  235 
secretaries'  report,  81 
ethics     (See  ' '  Ethics  ") 
new,  86 
unfinished,  85 
Business     men's     associations     (See 

' '  Commercial  associations  " ) 
Business    research     (See    "Commer- 
cial research") 
By-laws,  72-75 


Cancellation  of  orders,   elimination, 
102 

Carriage  Builders  National  Associa- 
tion, 23 
trade  school,  142 

Chamber  of  commerce     (See   "Com- 
mercial associations") 

Chamber  of  Commerce  of  the  United 
States,  5 

Charts     (See    "Graphic    method    of 
reports") 

Chicago  Milk  Shippers  Association  v. 
Ford,  decision,  340 

Clabaugh     v.     Southern     Wholesale 
Grocers     Association,     decision, 

342 
Clayton  Anti-Trust  Act,  281,  309 
Coal  Dealers  Association,  price-fixing, 

government  regulation,  2 1 
Coal  Dealers  Association  of  California 

V.  U.  S.,  decision,  340 
Commercial  associations,  definition,  3 
Commercial  functions,  96-112 
Commercial  research,  235-247 
Committees,  70 
executive,  69,  78 

afiiUated  associations,  64 
for  conferences,  150 
local,  123 
reports,  87 


INDEX 


383 


Committees — {Continued) 

special,  70 

standing,  85 
Competition,  6,  25-36 

unrestricted,  results,  28-31 
Conference  committee,  150 
Conservation,  materials,  1 1 5 
Contracts     (See  "Bids") 
Conventions     (See  "Meetings") 
Co-operation,  4,  25-36 

associations,  45 

purchase  of  supplies,  171 
Correspondence,  225 

legality,  316 

members,  316 
Cost  accounting,    terminology,    201- 

204 
Cost  association,  162 
Cost  Association  of  the  Paper  Indus- 
try, purpose  and  procedure,  163- 
166 
Cost  statistics,  249 
Cost    system     (See    "Uniform    cost 

system") 
Costs,  influence  on  price-fixing,  314 
Credit  bureau,    136-142 

inquiry  blank.  Form,  140 

members'  information  blank.  Form, 
141 

request  for  information,  Form,  141 


E 


Eastern  States  Lumber  Association, 
black    list,    government   regula- 
tion, 21 
Eastern  States  Retail  Lumber  Deal- 
ers Association,  organization,  38 
Eastern  States  Retail  Lumber  Dealers 
Association    v.    U.    S.,    decision, 
303,  334,  342 
Education     (See    "Trade    schools") 
Election     (See    also    "Application," 
"Membership") 
associate  members,  61 
members,  60 
officers,  68 
Employees,  associations'  attitude  to- 
ward, 122 
Employment  bureaus,  135 
England,  medieval  guilds,  15-19 
Ethics,  32-36 

code,       United       Typothetae     of 
America,  52-58 
Executive  committee,  69 
affiliated  associations,  64 
power  to  call  meeting,  78 
Executives,  associations  of,  347 
Exhibitions,  106 
Expenses,  traveling,  91 
Export  associations,  175 

instructions  for  packing,  176 


Discounts,  102 

attitude  of  association,  102,  173 
Dishonest  advertising, 
suppression,  103,  109 

National    Association    of    Piano 
Merchants,  no 
Distribution,  mediums  of,  100 
District  associations,  44 
Dues     (See  "Assessments") 
Duncan,    Dr.     C.     S.,     "Industrial 
Research,"  238 


Factory  system,  effect  on  guilds,  18 

Federal  Anti-Trust  Act,  1890,  20 

Federal  Trade  Commission  Bill,  309 

Fines,  67 

Fluctuations,  market,  elimination, 
236 

Ford  V.  Chicago  Mill  Shippers  Asso- 
ciation, decision,  340 

Ford  Motor  Company,  educational 
films,  107 


384 


INDEX 


Fonns, 

association  credit  report,    140- 141 

association  label,  126 

information  service,  259-264,  266, 
268,  270,  272 

label  registration  card,  131 

meeting  report  card,  83 

minutes  of  meeting,  89 

registration  of  brand,  132 

standard  cost  sheet,  188 
Fraudulent  selling,  elimination,  7 
Fvinctions, 

advertising,  103- 112 

commercial,  96-112 

conservation,  raw  materials,  115 

industrial,  1 13-126 

industrial  relations,  120 

information  service,  113 

purchasing  supplies,  97 

research  work,  116 

selling,  99 

standardization, 
products,  118 
raw  materials,  114 

waste,  elimination,  116 


Gompers  v.  Bucks  Stove  and  Range 
Company,  decision,  304,  336-338 

Government  regulation,  trade  asso- 
ciations, 20,  229-319 

Graphic  method  of  reports,  245,  274 
Forms,  260-261,  264 

Grenada  Lumber  Company  v.  Mis- 
sissippi, decision,  305,  330-332 

Group  insurance,  153 

Guild-craft,  15 

Guild-merchant,  15 

Guilds, 

advantages,  16 

compared  with  trade  associations, 

18 
England,  14-19 


H 

History,  14-24 

Honorary  membership,  59 


Incorporation, 

association,  76 

certificate.    United  Typothetae  of 
America,  49-58 

reasons,  46 
Industrial  functions,   1 13-126 
Industrial  relations, 

associations'  attitude  toward,  122 
Industrial  report  services,  247 
Industry,  relation  of  secretary,  213 
Information     service,     10,     12  7-1 61, 

235-247 

Forms,  259-264,  266,  268,  270, 
272 
industrial  report  services,  247 
raw  materials,  98,  113 
Insurance,  151 

by  association,  152 
group,  153 
International  trade-marks,  133 
Interrelated  associations,  42 
Interstate  associations,  44 
Inventory,  raw  material.  Form,  269- 
270 


Journals  (See  "Trade  journals") 


Labels,  125,  129 
Form,  126 
registration  card.  Form,  131 

Labor,  associations'  attitude  toward, 
122 

Labor  reports,  270 
Form,  271-272 

Lambert,  Rev.  J.   M.,  "Two  Thou- 
sand Years  of  Gild  Life,"  16,  22 


INDEX 


385 


Laundrymen's   National   Association 
of  America,  2;^ 

advertising,  105 
Lawlor  v.  Loewe,  decision,  304,  335 
Laws     (See     "Government     regula- 
tions, "  "  Legislation  ") 
League  of  Industrial  Rights,  46 
Legal  advisor,  315 

Legal  cases,  affecting  trade  associa- 
tions, 302-308,  327-344 

American  Tobacco  Company  v. 
U.  S.,  303,  332 

Clabaugh  v.  Southern  Wholesale 
Grocers  Association,  342 

Eastern  States  Retail  Lumber 
Dealers  Association  v.  U.  S.,  303, 
334 

Ford  V.  Chicago  Milk  Shippers 
Association,  340 

Gompers  v.  Bucks  Stove  and  Range 
Company,  304,  336 

Grenada  Lumber  Company  v. 
Mississippi,  305,  330 

Loewe  v.  Lawlor,  304,  335 

Lowry  v.  Tile,  Mantel  and  Grate 
Association,  341 

Nash  V.  U.  S.,  304,  335 

People  V  Sheldon,  341 

Standard  Oil  Company  v.  U.  S., 
302,  327 

U.  S.  V.  Coal  Dealers  Association 
of  California,  340 

U.  S.  V.  Eastern  Retail  Lumber 
Dealers  Association,  342 

U.  S.  V.  Southern  Wholesale  Grocers 
Association,  343 

U.  S.  V.  Trans-Missouri  Freight 
Association,  338 

Wheeler-Stenzel  Company  v.   Na- 
tional   Window    Glass    Jobbers 
Association,  341 
Legislation, 

against  early  trade  associations,  20 

antitrust,  299-319 

Clayton  Anti-Trust  Act,  309 


Legislation — (Continued) 

Federal  Anti-Trust  Act,  1890,  20 
Federal  Trade  Commission  Bill,  309 
Sherman  Anti-Trust  Act,  20,  281 
support,  5,  146 
tariff,  146 
trade,  origin,  300 

Leipzig  Fair,  Germany,  107 

Liability,  members,  46 

Liggett  stores,  loi 

List  of  associations  in  U.  S.,  345-379 

Local  associations,  44 

Local  committees,  functions,  123 

Local  Manufacturers  Association,  de- 
finition, 3 

Loewe  v.  Lawlor,  decision,  304,  335 

Lowry    v    Tile,    Mantel    and    Grate 
Association,  decision,  341 

M 

Magazines     (See  "Trade  journals") 
Mail,  225 

Mailing  list,  advertising  bureau,  112 
Malpractices,    elimination,    4-6,    38, 

102,  109 
Manufactures,    standardization,    119 
Market,  stabilizing,  313 
Measures     (See  "  Weights  and  meas- 
ures") 
Medieval  guilds     (See  "  Guilds") 
Meeting  report  card.  Form,  83 
Meetings,  76-95 

adjournment,  86 

frequency,  76 

minutes  of  previous,  81 

notification  of,  78 

order,  80-88 

place,  77 

price  discussion,  297 

program,  80 

records  of,  85 

reports,  in  trade  journal,  127 

reports  of  members,  81 
Form,  83 

reports  to  absentees,  86 


386 


INDEX 


Meetings — (Con.inued) 

time,  77 

voting,  88 
Members, 

correspondence,  316 

expelled,  68 

fines,  67 

information  service  to,  10,  127-161, 

235-247 
liability,  46 

notification  of  meeting,  76 
protection,  145,  161 
relation  of  secretary  to,  210 
relation  to  secretary,  207 
reports  from,  81 

Forms,    83,    250-251,    259,    265, 
267,  269,  271 
service  of  advertising  department 

to,  112 
speeches,  84 
suggestions  from,  217 
suspension,  68 
visits  to,  by  secretary,  230 
voluntary  participation  in  reports, 

243 
Membership,    3,    58,    62     (See    also 
"Applications,"  "Elections") 

active,  59 

assessments,  64 

aflfiliated,  59 

American  Paper  and  Pulp  Associa- 
tion, 60 

associate,  59,  61 
assessments,  64 

Book  Paper  Manufacturers  Asso- 
ciation, 60 

honorary,  59 

National    Metal    Trades    Associa- 
tion, 60 

qualifications,  58,  60 
Membership  association,  46 
Minutes,  88 

Form,  89 
Mississippi  v.  Grenada  Lumber  Com- 
pany, decision,  305,  330-332 


Motion  pictures,  107 
Music  Industries  Chamber  of  Com- 
merce, 

advertising,  105 

list  of  members,  346 

N 

Name,  choice,  47 
Nash  V.  U.  S.,  decision,  304,  335 
National  Association  of  Piano  Mer- 
chants   of    America,    dishonest 
advertising,  control,  110 
National  associations, 
committees,  70 
of  an  entire  industry,  40 
various  associations  of  an  industry, 
42 

assessments,  64 
National  Canners  Association,  41 
advertising,  106 
incorporation,  46 
research  work,  106 
National    Harness    Makers   Associa- 
tion, organization,  40 
National  Metal  Trades  Association, 

41.   44 

membership,  60 

National  Window  Glass  Jobbers  As- 
sociation, price-fixing,  govern- 
ment regulation,  2 1 

National  Window  Glass  Jobbers 
Association  v.  Wheeler-Stenzel 
Company,  decision,  341 

New  business,  86 

Notification  of  meetings,  78 


Office  manager,  225 

Office  organization,  224-234 

Officers,  63     (See  also  "Office  man- 
ager, "     "  Secretary, "     "  Statisti- 
cian,"   "Treasurer") 
duties,  69 

Open  contracts,  287 


INDEX 


387 


Open  price,  288 

Open-price  reports,  Form,  289-293 

Orders, 

cancellation,  102 

comparative  report,  Form,  263 

graphic  record  of,  Form,  260-261 
Organization,  47-62 

by-laws,  72-75 

legal  form,  45 

office,  224-234 

reasons  for,  37-46 


Publicity, 
activities,  71 
legislation,  5 
Purchases,  graphic  record  of.  Form, 

264 
Purchasing  association,   169 
Purchasing  supplies,  function  of  trade 

association,  97 
Purpose,  statement  of,  47 


Penalties     (See  "Fines") 
Pooled     advertising     (See     "Adver- 
tising") 
Pools,  19 

bonds,  given,  68 
Portland  Cement  Association,  adver- 
tising, 104 
President, 

duties,  69 

report  of,  86 
Price-fixing,  279 

guilds,  18 

pools,  19 
Prices,  278-298 

and  standardization,  1 1 4 

averaging  of,  295 

discussion  at  meetings,  297 

exchange,  legality,  312 

knowledge  of,  97 

maintenance,  6,  39 

open-price  report.  Forms,  289-293 

past;  report,  293 
Form,  294 
Production, 

comparative  report,  Form,  263 

graphic  record  of.  Form,  260-261 

waste,  elimination,  116 
Program  of  meeting,  80 
Programs,  yearly,  229 
Protection  of  members, 

from  solicitation,  145 

from  theft,  153 


Raw  materials, 
conservation,  115 
information,  98,  113 
new  sources,  1 1 6 
purchase,  97 
reports,  260 

Forms,  265-269 
standardization,  114 
Real  estate  owned  by  association,  46 
Record  of  meetings,  85 
Reports,  87 
annual,  87,  276 
by  president,  86 
comparison,  256 

Form,  263 
graphic  method.   Forms,   260-261, 

264 
labor,  270 

Form,  271-272 
meetings,  81 

Form,  83 
participation  in,  243 
quarterly,  Forms,  269-270 
raw  materials,  260 

Form,  265-269 
sales,  273 
special,  276 
statistical,  235-247 
wage,  270 

Form,  271-272 
weekly.  Forms,  250-251,  254-255, 

259,  265-268 
weekly,  rules  for  compiling,  252 


388 


INDEX 


Research  work,  235-247 

National  Canners  Association,  106 
new  sources  of  material,  116 
responsibility  of  secretary,  227 
Restraint  of  trade,  black  lists.  Eastern 

States  Lumber  Association,  21 
Retailers,  members  of  trade  associa- 
tion, 3 
Roll-call,  81 


Salary,  secretary,  232 
Sales, 

basis  for  assessment,  63-67 

function  of  trade  association,   99 

graphic  record  of,  Form,  260-261, 
264 

reports,  273 

terms,  102 
Salesmen's  associations,  166-169 
Schools     (See  "Trade  schools") 
Scientific     search     (See     "Research 

work") 
Sealed  bids,  287 
Secretary,  205-234 

annual  report,  87 

as  legal  advisor,  315 

as  treasurer,  231 

calls  from  members,  229 

choice,  9 

compilation  of  statistics,  10 

cost  association,  163 

duties,  224-234 

qualifications,  205-223 

relation  to  members,  207 

report  on  market  conditions,  81 

research  work,  227 

salary,  232 

sources  for,  208 

visits  to  members,  230 
Secrist,   Horace,   on   commercial  re- 
search, 237 
Seligman,  Dr.  Edwin  R.,  On  medie- 
val guilds,  16 


Sheldon  v.  People,  decision,  341 
Sherman  Anti-Trust  Act,  20,  281 
Silk  Association  of  America,  bulletin 

service,  113 
Slogans,  106 
Southern    Pine  Association,   weekly 

trade  barometer.  Form,  262 
Southern    Wholesale    Grocers    Asso- 
ciation V.  Clabaugh,  decision,  342 
Southern    Wholesale    Grocers    Asso- 
ciation V.  U.  S.,  decision,  343 
Special  associations,  41 
Special  reports,  276 
Speeches,  length,  84 
Standing  committees,  reports,  85 
Standard  cost  sheet.  Form,  188 
Standard  Oil  Company  v.  U.  S.,  deci- 
sion, 302,  327-330 
Standardization, 

commercial  research,  238 

manufactures,  119 

raw  materials,  114 

State  associations,  45 

Statistician,  248 

Statistics,  113,  248-277 

Forms,    250-251,    254-255,    259- 
272 
compilation,  240 
by  secretary,  10 
rules,  252 
cost,  249 

simple  reports,  242 
Stock, 

graphic  record  of.  Form,  264 
monthly  report,   members.   Form, 
267 
Stockdale,  Frank,  direct-by-mail  ad- 
vertising, 160 
Superintendent's  associations,  179 
Supplies,  purchase,  97,  169 
Suspensions,  68 


Tariff,  146 

Technical  associations,  180 


INDEX 


389 


Territorial  associations,  43 
Theft,  protection  from,  153 
"Three-year- plan,"     United     Typo- 

thetae  of  America,  1 53-1 61 
"Tickler"  system,  227 
Tile,  Mantel  and  Grate  Association 

V.  Lowry,  decision,  341 
Trade  journals,  127 

relation  to  association,  128 
Trade  laws,  origin,  300 
Trade-mark  bureau,  129 
Trade-marks,  international,   133 
Trade  schools,    142 

college  courses,   143 

United    Typothetae    of    America, 
153-161 
Traffic  bureau,  134 
Trans- Missouri   Freight    Association 

V.  U.  S.,  decision,  338 
Treasurer, 

bonds  given  by,  70 

duties,  69 

secretary  as,  231 

u 

Undesirable  applications,  61 
Unfinished  business,  85 
Uniform  cost  system,    11,    100,    182- 
204 
cost  association,  162 
report  on,  189 

standard  cost  sheet.  Form,  188 
United    Typothetae  and  Franklin 
Clubs,  158 


United  States  Bureau  of  Standards, 
120 

United     States     Fish     Commission, 

exhibition,  107 
United  States,  list  of  associations  in, 

345-379 
United  States  Supreme  Court,  deci- 
sions,   antitrust    laws,    302-308, 

327-344 
United  Typothetae  of  America, 
bureau  of  industrial  relations,  123 
certificate  of  incorporation,  49-58 
code  of  ethics,  52  -58 
"three-year-plan,"  153-161 


Vice-president,  duties,  69 
Voting,  88 


W 

Wage  report.  Form,  271-272 

Wages,  121 

War  Industries  Board,  37,  147 

standardization  of  industries,    118 

Weights  and  measures,  law  for  uni- 
form, 150 

Wheeler-Stenzel  Company  v.  Na- 
tional Window  Glass  Jobbers 
Association,  decision,  341 

Wholesalers,  members  of  trade  asso- 
ciations, 3 


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